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Consumer confidence has reached its highest point this year – driven by the Bank of England’s interest rate cuts.
The long-running GfK Consumer Confidence Index shows an improvement in how Britons have felt about their personal finances over the past 12 months, as well as in the year ahead.
August’s overall index score rose by two points to -17. This is the best reading since December, but shows consumers remain cautious in the current economic climate.
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GfK’s consumer insights director Neil Bellamy said the improving figures come after the cost of borrowing fell to its lowest level in two years.
He added: “The improved sentiment on personal finances is welcome, but there are many clouds on the horizon in the form of inflation – the highest since January 2024 – and rising unemployment.
“There’s no shortage of speculation, too, about what the autumn budget will bring in terms of tax rises.”
Mr Bellamy went on to warn that many British consumers remain in “wait-and-see mode”, meaning any surprise economic changes could result in a sudden shift in sentiment.
In other developments, a recent survey by the British Retail Consortium suggests 42% of shoppers now expect to spend more on groceries in the next three months.
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Some of the country’s biggest retailers have also written to Chancellor Rachel Reeves – warning further tax rises in the budget could affect living standards.
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