UK consumer sentiment recovers to strongest level since October

Sentiment among UK consumers has recovered to its strongest level since before the autumn budget last year, according to new figures.

The latest monthly S&P Global UK Consumer Sentiment Index found that surveyed consumers were still relatively downbeat but saw sentiment move higher after the latest cut to interest rates.

Earlier this month, the Bank of England voted to cut its base interest rate from 4.25% to 4%.

Positive feeling

The CSI, which surveys more than 1,500 households, reported a reading of 47.0 for August, rising from 45.1 in July. The reading is the highest since October.

Any reading below 50 points to negative sentiment, with a reading above 50 suggesting positive feeling among consumers.

Households reported the strongest sentiment about their personal finances for 13 months, although this remained in firmly negative territory.

There was also an improvement about how households viewed the labour market, with rises in job security and activity at work.

Maryam Baluch, economist at S&P Global Market Intelligence, said: “August CSI data comes hot on the heels of the recent rate cut decision made by the Bank of England earlier in the month.

“Data collection began just a day after the central bank’s announcement, providing a timely snapshot of sentiment in the wake of monetary policy easing.

“Encouragingly, the data reveals a slight revival in household confidence, which is a telling sign that the easing of monetary policy has been received positively by households across the country.”