New Data Showed That Britain’s Got Bravado

New Data Showed That Britain’s Got Bravado
Daniel Johnston

3 months ago2 mins

What’s going on here?

Data out on Friday showed that British consumers regained their confidence this month.

What does this mean?

Consumer confidence is basically a fancy term for how ready folks are to open their wallets. And since consumer spending habits are a big factor in the health of the overall economy, this measure is kind of a big deal. That meant that it was an especially pleasant surprise when the UK’s consumer confidence index got a little boost this month – with households’ outlooks on their personal finances and economic prospects ticking up from July. And it stands to reason that they’re feeling chipper: after all, inflation fell to its lowest in over a year in July, meaning that wages are finally outpacing price rises. In a sentence, that means more pounds in Brits’ pockets – which is bound to put a pep in anyone’s step.

UK consumer confidence

Why should I care?

The bigger picture: Not the time to count your chickens.

Besides a little blip in July, consumer confidence has been on a steady climb this year – and that chimes with the fact that the economy’s managed to dodge the recession that pesky forecasts keep predicting. But let’s hold off on the victory dance for now. Consumers are already grappling with rising rent and mortgage repayments, and it seems there’s even more to come: interest rates are expected to keep increasing, after all, with pundits predicting another hike next month.

Zooming out: No need for thermals.

Still, there will be a winter warmer for UK households: energy bills are set to drop for three months come October. That’s because the national energy price cap (which limits how much suppliers can charge for each unit) is set to fall by 7%. But – and there’s always a "but" – government support more generally is thinning out these days, so it’s anyone’s guess how households will actually fare when winter rolls around.

UK electricity price cap
Source: Ofgem


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