UK Consumer Confidence Hits Two-Year High in August

British consumer confidence reached a two-year high in August, with the GfK Consumer Confidence Index climbing to -14 from -17 in July. The surge defied economist expectations of a decline to -18 and coincided with a broader improvement in national mood following the appointment of Prime Minister Andy Burnham. This shift, often described as the Burnham bounce, follows the introduction of regional devolution promises and cost-of-living measures.

Intentions to make major purchases reached their highest level since 2021, and personal finance outlooks improved. This rebound in sentiment was corroborated by data from the British Retail Consortium, Barclays, LSEG/Ipsos, and YouGov/Cebr.

Despite the positive trend, GfK consumer insights director Neil Bellamy cautioned that a long-term spending recovery remains uncertain. He noted that Middle East instability, a difficult jobs market, and rising inflation continue to pose risks, stating, "There are still many challenges ahead that will test the mettle of UK consumers."