Data: Confidence edges down as consumers choose saving over spending

Sentiment fell by one point from -7 in July to reach -8 in August. The current level of consumer confidence remained at pre-pandemic levels, according to GfK’s consumer confidence index. 

This slight decrease marked the first fall in consumer confidence in seven months.

The major purchase index decreased by five points in July. Consumers indicated that they felt now was a good time to save as the savings index increased by five points in the same period, indicating consumers are moving their focus back to savings following increased spending due to the easing of restrictions.

Consumers expressed positivity about their personal finances over the next 12 months, with the index remaining at 11, which is 10 points higher than the same period last year.

Confidence in the general economic situation for next year dropped by one point, up 36 points in comparison with August 2020.

GfK client strategy director Joe Staton said: “Against a backdrop of cooling headline inflation and soaring house prices, the UK consumer confidence index is stable at -8 this August. Importantly, expectations for our personal financial situation for the coming 12 months are holding up and this positivity bodes well for the economy going forwards this year and next.

“Interestingly, this month the five-point fall in the major purchase index is counterbalanced by the five-point rise in the savings index, suggesting that consumers could be considering switching into saving rather than spending. Indeed, UK consumers have built their savings to record levels during Covid.

“With the economy continuing to open up and GDP bouncing back, the overall picture for the economic health of the nation is looking good for the remainder of 2021.”