Market research firm GfK’s Consumer Confidence Barometer rose one point to minus 13, its strongest reading since August 2024. The result was above the minus 16 level expected by economists in a Reuters poll.
The improvement was supported by greater optimism about personal finances and the broader economic outlook. GfK said confidence in the economy also reached its highest level since August 2024, while sentiment around personal finances reached an eight-month high.
The data provides another indication that households have shown resilience despite a difficult cost environment. Consumer spending remains an important component of the British economy, meaning changes in household confidence can influence retail activity, services demand and business investment decisions.
However, the improvement in sentiment remains measured. The headline confidence index is still firmly in negative territory, indicating that consumers remain more cautious than optimistic overall. GfK also warned that the deteriorating inflation outlook could weigh on sentiment if higher energy and fuel costs continue feeding into household expenses.
The mixed signals complicate the assessment of the British economy. Recent surveys from YouGov/Cebr and LSEG/Ipsos have also recorded improvements in consumer confidence, while separate readings from the British Retail Consortium and S&P Global have pointed towards weaker sentiment.
Such differences highlight the sensitivity of household confidence to the timing and methodology of surveys, as well as differences between perceptions of personal finances and the wider economy.
For retailers and consumer-facing businesses, improving expectations around personal finances could provide some support for discretionary spending. However, higher energy and fuel costs could reduce disposable income and increase operating expenses across transport, manufacturing, hospitality and retail.
The figures also carry implications for policymakers monitoring the relationship between inflation and domestic demand. Stronger consumer confidence can support economic activity, but renewed price pressures may limit the extent to which households translate improved expectations into higher spending.
Businesses are therefore likely to continue monitoring both confidence and real household income as they assess demand for the remainder of the year.
The September reading suggests that British households have not yet experienced a broad deterioration in confidence despite continuing cost pressures. Whether that resilience persists will depend partly on the path of inflation, energy prices and household purchasing power in the months ahead.
