Consumer confidence in the UK improved unexpectedly for the first time in August since February due to a more positive view on the economic outlook, according to a survey released on Tuesday.
The GfK/NOP consumer confidence barometer rose to -18 this month from -22 in July, confounding analysts’ expectations for a further deterioration to -24.
However, the confidence boost in August should be treated cautiously due to the impending severe spending cuts by the government and uncertainty over the economic recovery.
“This gain merely reverses a similarly large drop in July”, said Nick Moon at GfK NOP social research, “and in reality confidence in the economy’s future prospects remains below its June level and similar to May 2009 when we were still in the grips of a recession”.
The UK’s efforts to recover from an 18-month recession could be harmed by the slowing down of the global economy.
But, the survey showed perceptions of the economic situation over the next 12 months rose by 11 points to -14.
This survey comes just days after Markit and YouGov released their own findings from a poll of 2,000 households in which people said they were increasingly worried about higher costs of living and losing their jobs.
Almost a third of participating households in the survey said their finances had got worse compared to 6% who had seen an improvement.
Nearly 69% of respondents reported a rise in the price of their goods and services in August from July, the highest level since the survey began 18 months ago.
An overall depressing picture was completed by less job security and a weak housing market.
