UK consumers are ignoring concerns about their personal finances and taking confidence from the wider economy’s resilience, research revealed on Friday.
The GfK consumer confidence index rose a point to -9, up from a negative balance of -10 in August and building on an upward shift of two points in July.
But confidence in personal finances, current and future, slipped this month but retail sales in the UK continue to grow despite non-food prices increasing at their highest rate for 25 years, said GfK’s head of market dynamics, Joe Staton.
Measure of confidence in the economic situation in the previous 12 months rose 2 points and confidence in the coming 12 months rose 3 points.
“Consumers appear to be in a mixed mood – with some confidence measures up and others down – yet there’s a strong note of defiance,” Staton said.
“Many commentators expected shoppers to cut back on spending thanks to the lower purchasing power that arises from higher inflation and weak wage growth. But consumers are still spending out there, and have repeatedly defied predictions of a downturn since last year’s Brexit vote, partly by running down savings and/or borrowing more.
“Indeed, the major purchase indicator has crept up a second month in a row and the savings index has sagged. It’s live now, pay later. This defiant consumer mood seems to be the ‘new normal’. But how long can it last?”
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