British consumers are at it again. Latest economic figures reveal that consumers have rebounded after volatility following the Brexit vote. The period immediately following the EU referendum saw the largest drop in confidence for 21 years.
Strong high street sales in July, an upswing in employment, and a general ‘business-as-usual” approach has tempered the volatility most economists foresaw.The GfK consumer confidence index released today highlights a five-point increase, suggesting that the Bank of England’s interest rate cut earlier this month to curb the knee-jerk reaction to save may have worked to stave off a recession.
“We’re reporting some recovery in the Index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK. The uptick in confidence is driven by good news from hard data, the combination of historic low interest rates matched with falling prices and high levels of employment,” Joe Staton, head of market dynamics at GfK commented.
“We Brits are clearly determined to carry on shopping for today rather than saving for tomorrow.”
UK Consumer Confidence Measures – August 2016
The Overall Index Score has increased five points this month to -7. All measures used to calculate the index score went up.
Personal Financial Situation
The index measuring changes in personal finances during the last 12 months has increased by one point this month to 0; this is three points lower than August 2015.
The forecast for personal finances over the next 12 months has increased by five points this month to +4; this is three points lower than this time last year.
General Economic Situation
The measure for the General Economic Situation of the country during the last 12 months has increased two points this month to -23; this is 26 points lower than August 2015.
Expectations for the General Economic Situation over the next 12 months have increased 11 points to -22 this month; this is 25 points lower than August 2015.
Major Purchase Index
The Major Purchase Index has increased nine points this month to +7; this is ten points lower than this time last year.
The Savings Index is 16 points lower this month at -15; which is 17 points lower than August 2015.