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UK consumer confidence bounces back to 15-year high in Aug: GfK
[LONDON] British consumer morale unexpectedly rose in August to match June's 15-year high, as low inflation and a recent pick-up in wages made Britons more upbeat about their financial prospects.
Market research company GfK said its monthly sentiment index jumped to +7 in August from +4 in July, matching June's figure, which was the highest since January 2000.
With inflation at zero, a gradual recovery in pay is giving some relief to workers who suffered an almost unprecedented loss of spending power during Prime Minister David Cameron's first term. "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, are translating into high levels of confidence across all major measures," Joe Staton, head of market dynamics at GfK said.
A rise in sterling and fall in commodity prices have kept price pressures in check in Britain and, combined with record low interest rates, have helped boost disposable income.
While the market turmoil in China has cemented the view that rates will stay at record lows for longer, it has also raised concerns about the global economic outlook and is beginning to take a toll on consumer confidence, a separate survey showed.
The consumer confidence index in a survey by YouGov and the Centre for Economics and Business Research fell slightly month-on-month to 114 in August from 114.2 in July. "The early weeks of this month saw consumer confidence reach a highpoint for the year. However, the market tremors over the past week have been felt by people in the UK and we have seen a clear drop-off in confidence as a result," Stephen Harmston, head of YouGov Reports said.
Global share markets were hit this week by worries that the Chinese economy, the most important engine for the world economy, was growing at a much slower pace than Beijing's 7 per cent target for 2015.