LONDON (Reuters) -British consumers have turned a bit more confident this month after the latest interest rate cut by the Bank of England but are vulnerable to worries about rising inflation and potential tax increases, a survey showed on Friday.
The August reading of market research firm GfK’s consumer confidence index rose to its highest since December at -17, up from -19 in July, boosted by a three-point improvement in households’ sentiment around their personal finances.
“Consumer confidence continues to move in a very narrow band, and there’s no sense that it is about to break out into fresher, more optimistic territory,” Neil Bellamy, consumer insights director at GfK, said.
“The UK’s consumers are still in wait-and-see mode, and any surprises could result in sudden and sharp changes in sentiment,” Bellamy said.
He pointed to data this week which showed inflation rose to 3.8% in July and media reports of possible tax increases at finance minister Rachel Reeves’ autumn budget as possible drags on confidence in the coming months.
GfK’s measure of savings dropped by four points to +30 in August from its highest level since 2007 in July.
The GfK survey was based on a poll of 2,002 individuals aged 16 conducted between August 1 and August 14.
(Writing by William Schomberg; editing by David Milliken)
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