Consumer confidence rebounds as Brexit shock subsides

Confidence among UK consumers increased by five points in August, with all five measures used to calculate the index score rising from July.

Market research firm GfK reported on Wednesday that its long-running UK Consumer Confidence Index stood at -7, up from -12 a month earlier in the wake of the referendum decision to leave the European Union. The index remains below pre-referendum levels, however.

Commenting on the latest survey, Joe Staton, head of market dynamics at GfK, said:

?We?re reporting some recovery in the Index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK. The uptick in confidence is driven by good news from hard data, the combination of historic low interest rates matched with falling prices and high levels of employment.?

Staton also highlighted the ?remarkable? 16-point collapse in GfK?s Savings Index, down from +1 last month to -15.

People are ?clearly determined to carry on shopping for today rather than saving for tomorrow,? he said.

GfK?s findings are in line with the YouGov/Cebr Consumer Confidence Index, released on Friday, which showed its largest monthly increase since February 2013.

YouGov said that August?s improvement in consumer confidence ?follows positive news from other areas of the economy and punctures the arguments of those who predicted immediate economic Armageddon following a Brexit vote. Both inflation and unemployment are low, for now, which is undoubtedly supporting consumer optimism.?

But the research firm also noted that consumers have yet to feel many – if any – effects from the vote to leave the EU. And despite the strong improvement during August the index has only recovered around half of the ground it lost in the wake of the referendum.

?Everything could change once details of the deal to leave the EU emerge and the process of extracting ourselves from the Union becomes a reality,? YouGov concluded.