UK consumer confidence hits near three-year high in August | kbnmart

British consumer confidence remained at its highest level in nearly three years in August, supported by improved sentiment about personal finances and major purchases, adding to positive signs in the wider economy, a survey showed on Friday.

The GfK consumer confidence index, the longest-running gauge of economic sentiment among the British public, held steady at -13 in August, matching its highest level in 34 months in July. A Reuters poll of economists had pointed to a reading of -12.

The survey follows mostly positive business data since Prime Minister Keir Starmer’s Labour Party won a landslide election victory last month. Business polls put the economy on track for strong growth in the second half of 2024.

The survey’s gauge of enthusiasm for major purchases rose to its highest level since January 2022, while personal financial expectations also rose.

“This is perhaps the most positive outlook due to the mortgage rate cut at the beginning of August, and hopes of further cuts,” said Joe Staton, director of client strategy at market research firm GfK.

The Bank of England cut borrowing costs from a 16-year high of 5.25% earlier this month, but Governor Andrew Bailey and other senior officials have signaled they may not follow up with further rapid rate cuts.

Investors on Thursday were pricing in less than a 30% chance of a rate cut in September.

The Bank of England will cut interest rates only once this year, in November, a Reuters poll of economists published on Wednesday suggested.

However, the GfK economic sentiment indicators have slowed in the past and future.

The poll was conducted on 2,003 people between August 1 and 15.