UK consumer confidence hits over two-year high in September as personal finances improve: GfK

British consumer confidence unexpectedly rose to its highest level in more than two years in September, with households becoming more optimistic about their personal finances, according to market research firm GfK, adding to recent signs of resilience in the UK economy, Reuters reported.

GfK's Consumer Confidence Barometer climbed one point to -13 this month, its highest reading since August 2024. Economists polled by Reuters had expected the index to fall to -16.

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Personal Finances Improve

The survey showed a broader improvement in household sentiment. Confidence in the economic outlook increased to its highest level since August 2024, while consumers' assessment of their personal finances reached an eight-month high.

The improvement suggests that households have become somewhat more confident about their financial position despite persistent concerns over the cost of living and the wider economic environment.

Inflation Remains A Concern

GfK cautioned that the recent improvement in sentiment could come under pressure if inflation continues to accelerate. Rising energy and fuel costs could weigh on household budgets and undermine the recent gains in consumer confidence, Reuters reported.

Despite the improvement in the headline reading, confidence remained firmly in negative territory, highlighting that households continue to have concerns about the economic outlook.

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Mixed Signals From Other Surveys

Other recent measures of UK consumer sentiment have also shown signs of improvement. Consumer confidence readings from YouGov/Cebr and LSEG/Ipsos reached their highest levels since February earlier this month.

However, the broader picture remains mixed. Surveys conducted by the British Retail Consortium and Opinium, as well as S&P Global, have pointed to weaker consumer confidence.

The conflicting readings suggest that while some households are becoming more optimistic about their finances and the economy, persistent inflationary pressures and higher energy and fuel costs remain potential challenges for consumer sentiment.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)