Story perspectives

UK Consumer Confidence Rises Amidst Spending Shifts

9/10/2025

Summary

Story summary

UK consumer confidence rose to 28% in August, up from 22% in July, following a base rate cut.
Year-on-year consumer card spending grew by 0.5%, down from 1.4% in July, with essential spending declining.
Discretionary spending increased by 2.0%, notably in health and beauty (up 15.6%) and furniture (up 11.6%).
Food price inflation concerns persist, with 89% of consumers worried about rising costs.
Retail sales rose by 3.1% year-on-year in August, driven by food and drink sectors.
The high street is recovering, particularly food-led businesses, due to increased consumer demand.
Speculation about tax rises may affect consumer confidence ahead of the Autumn Budget.

History

Historical Context

The 2008 global financial crisis severely impacted consumer confidence, which plummeted to historic lows. In response, the Bank of England reduced interest rates to 0.5%, aiming to stimulate spending. As of 2023, consumer confidence has rebounded to 28%, indicating a recovery, though concerns about food price inflation and potential tax increases pose risks to future economic growth.

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Story summary

UK consumer confidence rose to 28% in August, up from 22% in July, following a base rate cut.
Year-on-year consumer card spending grew by 0.5%, down from 1.4% in July, with essential spending declining.
Discretionary spending increased by 2.0%, notably in health and beauty (up 15.6%) and furniture (up 11.6%).
Food price inflation concerns persist, with 89% of consumers worried about rising costs.
Retail sales rose by 3.1% year-on-year in August, driven by food and drink sectors.
The high street is recovering, particularly food-led businesses, due to increased consumer demand.
Speculation about tax rises may affect consumer confidence ahead of the Autumn Budget.

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