LONDON — British consumers are carrying on and while U.K. spending has improved, it still remains below its level prior to the country’s vote to leave the European Union.
According to a study released by market research firm GfK on Wednesday, the consumer confidence index increased five points this month to negative 7 compared with negative 12 in July. It regained almost half the ground lost last month.
The survey noted that consumers said the outlook for the economy and personal finances had improved. GfK head of market dynamics Joe Staton noted the rebound was due to “the historically low level of combined interest rate to lower prices and a high level of employment.”
“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 U.K.,” said Staton. “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. This can be seen in positive growth across all major measures including both our Personal and General Economic situation for the next 12 months. And at +7 points (a jump of nine points from last month), the Major Purchase Index reflects strong retail figures. But more remarkable is the 16-point collapse in the Savings Index (down from +1 last month to -15). We Brits are clearly determined to carry on shopping for today rather than saving for tomorrow.”
Meanwhile, Verdict Retail, a monthly consumer confidence tracker, noted that U.K. shoppers’ confidence increased, with its latest poll showing that shoppers’ confidence has recovered half of its initial dip in July, following the Brexit vote in June.
Verdict Retail said 49 percent of shoppers still anticipate “a worsening of the economy” over the next six months and noted that overall the U.K.’s economic outlook “strengthened by 10.9 percentage points in July,” with London the only area with a more negative view on the economic future in comparison to June.
“While the Brexit impact will linger for the foreseeable future, it is encouraging to see that consumers are relatively more positive than last month,” said Verdict Retail analyst Zoe Mills. “The swift appointment of a new prime minister is likely to have helped eliminate some of the uncertainty that was felt in the month prior. However, consumer confidence is still some way from reaching pre-Brexit levels.”
Each month the British retail agency and consulting firm surveys 2,000 consumers’ views about the economy, personal finances and future retail spending.