UK consumer confidence has surprisingly hit a two-year high this morning, but the recovery could be faltering as inflation climbs.
Research group GfK reports its Consumer Confidence Barometer rose to -13 in September, a rise of one point on August, with people more optimistic about their personal finances and the wider economy.
That’s the highest level since August 2024, just after the last general election, and higher than forecast. Encouragingly, this is also the first time since summer 2024 that consumer confidence has risen for three months in a row. But less cheeringly, consumer confidence is still in negative territory, and there are signs that the recovery could be faltering.
Over the summer, UK businesses reported a “Burnham bounce” after the new prime minister took the wheel from Sir Keir Starmer, with measures including a cap on bus fares and a discount on business rates for pubs, clubs and live music venues.
Bloomberg suggests GfK’s data shows this recovery is running out of steam, as higher energy costs push up inflation. GfK says consumers are less willing to buy big-ticket items this month, and more keen to save money instead.
The oil price is dropping, amid reports the US and Iran are discussing a phased deal to reopen the strait of Hormuz.
Reuters reported that US and Iranian negotiators in New York are exploring “a phased path out of war” that would involve Tehran reopening the strait of Hormuz and Washington lifting its economic blockade of Iran. Brent crude is down 1.25% today at $105.30 a barrel.
French president Emmanuel Macron is leading the fight against the US ban on US diesel exports. Macron said he told Donald Trump a 90-day diesel export ban reportedly being considered by the White House was a bad idea, Politico reports.
Macron said: “I think all the experts around him and all the American refiners can only tell him the same thing. This decision would be a bad one — not just for the rest of the world, but for the U.S. economy as well.”
Today’s key events
• 10.15am: BoE governor appears at the Monetary Economics Conference
• 1.30pm BST: US durable goods orders data
• 3pm BST: University of Michigan’s US consumer sentiment index
We’ll be tracking all the main events throughout the day on our business live blog …
