By Joshua Kirby
U.K. consumers felt a little better about their finances this month as the Bank of England lowered borrowing costs, though sentiment remains weak amid wider economic turmoil.
Consumer confidence rose two points to minus 17 in August from minus 19 in July, according to research group GfK’s monthly index, published with the Nuremberg Institute for Market Decisions.
The increase suggests sentiment is at its sunniest so far this year, but still well below the prepandemic trend. The uptick was driven by an improvement in respondents’ mood around their personal financial situation in a month in which the BOE’s monetary-policy committee cut interest rates to 4.00%, offering some relief to mortgage holders and loosening credit conditions a little.
“The improved sentiment on personal finances is welcome, but there are many clouds on the horizon in the form of inflation and rising unemployment,” GfK’s Neil Bellamy said. Consumers indeed felt a little more pessimistic about the general economic situation for the year ahead, the survey showed. Annual price inflation picked up pace last month, figures earlier this week showed, and many economists expect the rate to reach 4.0% before easing later in the year.
“The U.K.’s consumers are still in wait-and-see mode, and any surprises could result in sudden and sharp changes in sentiment,” Bellamy said.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
08-21-25 1915ET