UK consumer confidence hits two-year high, but ‘Burnham bounce’ may be fading – business live

UK consumer confidence has reached a two-year high, but the post-election "Burnham bounce" may be waning as inflation rises, according to a recent report. GfK, a research group, revealed that its Consumer Confidence Barometer increased to -13 in September, a one-point gain from August. This marks the highest level since August 2024, following the general election, and surpasses expectations.

While this upward trend is encouraging, especially as it's the longest consecutive three-month increase since summer 2024, the overall index remains in negative territory. Higher energy costs have contributed to inflation, potentially weakening the recovery. Neil Bellamy, GfK's consumer insights director, stated that the resurgence in inflation eliminates a significant positive factor seen in prior months.

Moreover, consumers are now more inclined to save money rather than make major purchases. The Major Purchase Index dropped by one point this month, coinciding with the start of the crucial Golden Quarter for retailers. The Savings Index, however, surged by five points, suggesting that those with the means are preparing for a financial buffer.