UK consumer confidence rises for first time since February, forward looking components improve markedly

 
Headline consumer confidence rose 4 points to -18 in the August GfK consumer confidence survey, marking the first month since February that confidence has improved on this measure. While a seasonal adjustment of the data reveals that the move in August was not so pronounced, the headline balance of this survey rarely provides the best insight into the outlook for consumers (the headline balance takes both forward and backward-looking components into account).

The August survey saw consumers' assessment of the economic situation over the next 12 months improve markedly, with the balance measuring this rising by 11 points to -14 on the month.

Meanwhile, respondents' assessment of their own finances over the coming year also improved, with the balance measuring this rising by 3 points to -3. Consumers did, however, feel that the likelihood of making major purchases had worsened in August; the balance measuring this fell by 4 points to -20. The balance measuring whether 'now is a good time to save' also decreased by 4 points to -6 on the month, but we would note that this has not been an accurate indicator in recent months.

On the whole, today's outturn is encouraging as the largest driver of the improvement was an improved assessment of the economy.

source: BarCap