Fewer big-ticket purchases as consumers continue to save

Consumer confidence fell slightly last month, according to new data.

GfK, the data analytics company, recorded consumer confidence at -8 in August, down from -7 a month earlier. Consumer confidence is still higher than the -9 recorded in June.

While falling on a monthly basis, consumer confidence is still higher than before the onset of the pandemic, according to this index from GfK.

Back in March 2020, before the first lockdown started, the consumer confidence index was -9.

One driver behind this latest fall in consumer confidence is a reluctance to make significant purchases.

The GfK major purchase index was -3 in August, down from +2 in July. This time last year, this major purchase index stood at -25.

Instead of buying big-ticket items, consumers are instead adding to their cash savings, with the savings index scoring +25 this month, up from +20 in July.

Joe Staton, client strategy director at GfK, said:

“UK consumers have built their savings to record levels during COVID.

“Against a backdrop of cooling headline inflation and soaring house prices, the UK consumer confidence index is stable”.

Another measure within this new data is households’ forecasts for their personal finances during the next 12 months.

This score came in at +11 in August, the same reading as seen in July, and 10 points higher than that recorded in August last year.

Staton continued:

“With the economy continuing to open up and GDP bouncing back, the overall picture for the economic health of the nation is looking good for the remainder of 2021.”

GfK asked households how they expect the UK economy to develop during the next twelve months, resulting in an index reading of -6, down from -5 a month earlier.