UK consumer sentiment picks up in September

(Sharecast News) - UK consumer sentiment picked up in September as households exhibited renewed confidence in their financial outlook for the year ahead, according to a survey released on Monday. The S&P Global UK consumer sentiment index rose to 47.8 from 47.0 in August, signalling the strongest sentiment for 14 months. It was also the third straight month of improvement.

A reading above 50.0 indicates growth while a reading below signals contraction.

The household finance index came in at a 14-month high of 48.0 in September, up from 46.0 the month before, while the spending sentiment index dipped to 41.1 from 41.2.

The labour market sentiment index increased to 55.2 from 54.7 in August, hitting a 14-month high.

Meanwhile, the debt sentiment index dipped to a two-month low of 50.0 from 50.2.

Maryam Baluch, economist at S&P Global Market Intelligence, said: "The latest CSI data brought further encouraging news. Following a much needed boost for households last month after the central bank's rate cut, a further strengthening of household sentiment regarding their financial wellbeing was observed in September. The headline index hit a 14-month high.

"One of the standout findings is that households are expressing renewed optimism regarding their financial wellbeing over the coming year. While confidence was slight overall, it reflected the strongest sentiment recorded since the post-election surge last July. Additionally, perceptions surrounding current finances were the least pessimistic in over four years.

"A key factor contributing to the improved financial outlook was continued strong sentiment regarding the labour market, with optimism close to the record-high observed back in July 2024. Underlying trackers such as income from employment, workplace activity, and job security all showed improvements during the latest survey period. Furthermore, the borrowing situation stabilised in the third quarter, a notable shift from the difficulties households reported during the quarter prior.

"Although UK households have demonstrated resilience amidst economic and geopolitical uncertainties - largely driven by easing monetary policy and upbeat views on the labour market - challenges, particularly the flatlining of the UK economy as indicated by the latest official figures, will continue to pose obstacles to consumer confidence."