LONDON – British consumer morale cooled a little in August after touching its highest level since the start of the COVID-19 pandemic, according to a survey that also showed households were turning their minds towards saving rather than spending.
The monthly consumer confidence index published by research firm GfK fell to -8 in August from -7 in July, the highest since February 2020.
Economists polled by Reuters had mostly forecast another reading of -7.
Still, GfK said the gist of the survey remained upbeat.
“Expectations for our personal financial situation for the coming 12 months are holding up and this positivity bodes well for the economy going forwards this year and next,” said Joe Staton, client strategy director at GfK.
“Interestingly, this month the five-point fall in the major purchase index is counterbalanced by the five-point rise in the savings index, suggesting that consumers could be considering switching into saving rather than spending.”
How quickly consumers spend the savings they built up during the pandemic, especially among better-off households, is key to the durability of Britain’s economic recovery.
Despite the spread of new coronavirus variants, Britain’s economy expanded by 4.8% last quarter and is expected to grow 2.6% this quarter, according to a Reuters poll of economists published last week. [ECILT/GB]