Consumer confidence in the UK has reached a two-year high in September, with GfK's closely-watched barometer rising to -13. This represents an increase of approximately one point since last month and is the highest level recorded since August 2024.
This marks the first time since summer 2024 that GfK has reported three consecutive months of growth in the index. A significant factor in September's uplift was an improvement in Britons' perceptions of the economy over the past year, which eased by four points to -36. Attitudes towards personal financial situations over the past year also improved by three points to -3, while perceptions for the coming year rose by one point to five points.
Despite this improvement, Neil Bellamy, GfK's consumer insights director, cautioned that the rebound could lose momentum. He stated that the return of higher inflation removes one of the strongest positives seen in previous months, and that confidence remains "firmly in negative territory." Inflation rose from 2.9 to 3.1 per cent in August, driven by increases in petrol, diesel, and air fares.
A Bank of England policymaker, Clare Lombardelli, deputy governor, warned on Thursday that interest rates may need to rise if energy costs remain high, making it "increasingly likely" that monetary policy will need tightening. The Bank of England kept interest rates unchanged last week.