Business

UK consumer confidence 'improves in August'

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Confidence among UK consumers improved in August, a survey has suggested, but remains below pre-Brexit vote levels.

Market research firm GfK said its consumer confidence gauge had recovered to -7 in August, up from -12 in July.

Encouraging economic data, low interest rates, falling prices, and high levels of employment have all contributed to a rise in confidence, it said.

GfK's survey also indicated a sharp drop in people's propensity to save in August.

'Wait-and-see'

GfK's Joe Staton said there had been "some recovery" in consumer confidence in August compared with July, when the firm's figures suggested confidence dropped at its sharpest rate for more than 26 years.

"We're reporting some recovery in the index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK," he said.

The improvement was in keeping with recent data suggesting consumers have remained resilient after the 23 June referendum, even though there have been some indications that they are more reluctant to make big purchases than before the referendum.

Last week, a YouGov survey said consumer confidence recorded its highest monthly bounce in August since February 2013, while official data found retail sales increased by 1.4% in July from the previous month.

Mr Staton added that it was "remarkable" that GfK's savings survey figures - which are separate from its consumer confidence figures - had collapsed by 16 points in a month.

People are "clearly determined to carry on shopping for today rather than saving for tomorrow," he said.

He told the BBC: "We have seen a drop this month [in savings figures] very much in line with the change in the interest rate... from the Bank of England."

The Bank cut its benchmark interest rate from 0.5% to a record low of 0.25% at the beginning of August.

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