- UK consumer confidence fell to 42.9 in August from 43.4 in July.
- Job security dropped to its lowest level since April 2023.
- Household finances improved slightly, while the technology sector continued to report stronger confidence.
UK consumer confidence weakened in August as concerns over job security reached their lowest point in more than three years.
The S&P Global UK consumer sentiment index fell to 42.9 from 43.4 in July. A reading below 50 indicates that households remain broadly negative about the economic outlook, although the latest decline was relatively modest.
The bigger movement was in how people viewed their jobs. The survey's job security index fell to 45.6, its lowest level since April 2023 and the third consecutive month in which respondents reported growing concerns about the UK labour market.
That comes as the jobs market continues to lose some of its earlier momentum. Official employment figures due from the Office for National Statistics later this week are expected to provide a clearer picture of how hiring, vacancies and unemployment have been developing.
For households, the concern may be less about what they are earning right now and more about how secure that income feels.
Maryam Baluch, economist at S&P Global Market Intelligence, reportedly said the recent improvement in economic growth was not yet feeding through to households, while labour market concerns were becoming a growing drag on confidence.
The money picture is slightly less gloomy
There was one small improvement in the survey. The household finance index rose to 41.2, its highest level for five months, suggesting some households felt a little more comfortable about their finances than they did in July.
Private sector workers also reported some renewed optimism after recent concerns linked to conflict in the Middle East and political instability.
But the overall picture remains cautious. With consumer confidence still below 50, households appear to be holding back despite some signs that the wider economy is improving.
The technology sector was one of the clearer exceptions.
S&P Global said AI-related investment was helping support job security and income growth in the sector, with technology-focused businesses showing stronger conditions than much of the wider economy.
That could offer a glimpse of where some of the improvement in the economy is coming from, although it may not yet be enough to change how households generally feel about their financial position.
There are also early signs that expectations about the future may be improving. Baluch reportedly said future financial prospects had brightened slightly, suggesting a possible “Burnham Bounce” following Andy Burnham becoming prime minister on July 20.
The improvement is still limited, however. The index remains firmly below the level that would indicate broadly positive sentiment.
That leaves the UK economy with an awkward gap between the headline growth figures and how secure households actually feel. The next set of official labour market figures could provide an important test of whether the recent rise in job concerns is temporary or points to a deeper weakening in confidence.
