UK consumer confidence rose slightly in August, but households remain cautious as inflation and economic uncertainty continue to bite.
According to the BRC-Opinium Consumer Sentiment Monitor, confidence in the state of the economy increased to -32 in August, up from -33 in July.
Households were slightly more optimistic about their personal finances (-6 vs -7 last month) and retail spending intentions ticked up to +4. Overall spending plans held steady at +16, while expected savings rose to +2, from -3 in July.
BRC CEO Helen Dickinson said: “While consumer confidence in the economy crept up this month, it remains 24 points lower than a year ago, with older generations seeing the biggest falls.
“Full-time workers were far more optimistic than part-time staff, the unemployed or retirees, reflecting that they were also the only group expecting their financial position to improve over the next three months. With prices rising and food inflation predicted to hit 6% by the end of the year, households are expected to spend more on retail goods in the coming months, particularly groceries.”
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Dickinson added that rising food prices will make it harder to lift sentiment “out of the doldrums.”
“Belief in the economy has stayed stubbornly below -30 for six of the last seven months, a far cry from the net positive sentiment seen in July 2024. Consumers see rising prices, gap-toothed high streets, and reports of large businesses falling into administration.
“Much rides on the Chancellor’s plans for retail, hospitality and leisure, and only a significant reduction in the business rates burden can bring about the investment needed to reinvigorate Britain’s high streets and town centres.”
The latest CPI inflation figures show headline inflation rising to 3.8%, and food inflation rising to 4.9%, with households feeling the pinch as the cost of their weekly shop climbs.
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