According to the UK Consumer Confidence Survey, part of research carried out by GfK on behalf of the European Commission, the UK Consumer Confidence Index has increased by three points this month to seven points as retail sales grow due to rising confidence in the future of the UK economy.
Four of the measures used to calculate the Index saw increases this month, while one saw a one-point decrease.
Confidence in the general economic situation of the country rose by four points this month to three, up four points year on year. Expectations for the general economic situation over the next 12 months also increased by four points to three, though this is eight points lower than this time last year.
The Major Purchase Index increased by six points to 17 this month, up 18 points year on year.
While both the Savings Index and the measure of confidence in personal finance have decreased by one point, both remain 10 points higher than August 2014.
Joe Staton, head of market dynamics at GfK, says that August’s Index continues the positive growth curve seen since the start of 2015 which he believes is due to “rising house price inflation and improving employment growth prospects, combined with falling petrol prices and day-to-day living costs, as well as low interest rates”.
“Confident shoppers are happy shoppers and happy shoppers spend more,” he told Marketing Week.
“Taking advantage of very low inflation, shoppers have propelled the annual growth in retail sales to 4% in July. Although we’re seeing shoppers agree that now is a good time to make a major purchase such as furniture or electrical goods, consumers remain bargain-hungry deal-seekers. Getting consumers to part with every pound is hard work and will remain so.”
He added that strong confidence in the future of both personal financial and general economic situations, with the forecast for personal finances over the next 12 months also up by seven points in August, two points higher than last year, shows that consumers “now believe that UK economic recovery is robust”.
“We’re in the black and prospects for growth are fact and not fiction,” he added.