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UK consumers most optimistic since early 2022: GfK

Published 22/09/2023, 00:07
Updated 22/09/2023, 00:10
© Reuters. FILE PHOTO: People shop at Borough Market in London, Britain July 19, 2023. REUTERS/Anna Gordon/File Photo

LONDON (Reuters) - British consumers are their most optimistic since the start of 2022 as they turn more hopeful about the economy with inflation on the wane and wages growing, a survey showed on Friday.

The GfK consumer sentiment indicator rose for a second month in a row to -21 in September, the highest since January last year, from -25 in August although it remained below the average of -10 for the survey, which has been running since 1974.

Economists polled by Reuters had forecast a fall to -27.

"While this month's improved headline score is good news, it's important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough," Joe Staton, GfK's client strategy director, said.

"The reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative."

Households' expectations for their personal financial situation over the coming year edged up to -2 to -3. A year ago, the reading stood at -40 after energy prices soared.

A gauge of views about the economy over the next 12 months improved more sharply to -24 from -30.

Consumer price inflation dropped to 6.7% in August, down from a 41-year high of 11.1% reached in October 2022 but still more than three times the Bank of England's target.

© Reuters. FILE PHOTO: People shop at Borough Market in London, Britain July 19, 2023. REUTERS/Anna Gordon/File Photo

The BoE on Thursday paused its long run of interest rate rises as the country's economy slowed, holding Bank Rate at 5.25% after 14 back-to-back hikes.

The GfK data was based on a survey of 2,001 people conducted between Sept. 1 and Sept. 13.

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