Consumer confidence in the UK weakened in August as fears about employment intensified. The mood undercut signs of a broader economic recovery and left households cautious about their financial prospects.
The S&P Global UK consumer sentiment index fell to 42.9 from 43.4 in July, when confidence had reached a four-month high. Any reading below 50 means pessimism remains the dominant mood among households.
The decline was driven mainly by growing anxiety about employment. The survey's job security measure fell to 45.6, its lowest level since April 2023, and marked the third consecutive month in which respondents reported increasing concern about the labour market.
"Recent better growth seen in the economy is failing to feed through to households," said Maryam Baluch, economist at S&P Global Market Intelligence. "Labour market concerns" were becoming an increasingly important drag on confidence, she added.
The figures come ahead of official labour market data from the Office for National Statistics, which is expected to provide further evidence of a slowdown in vacancies and hiring.
The weak sentiment was not universal. The household finance index edged up to 41.2, its strongest reading for five months. Private sector workers also reported some improvement in their outlook after months of uncertainty linked to political instability and the conflict in the Middle East.
Technology was another relative bright spot. S&P Global said continued investment linked to artificial intelligence was supporting employment prospects and incomes in the sector, providing some evidence that technology-led growth is beginning to filter into the wider economy.
Future financial expectations improved modestly, a sign of what S&P Global described as a possible early 'Burnham Bounce'.
But the overall reading remains firmly in negative territory. For the government, the combination of weak consumer confidence and deteriorating perceptions of job security presents a more immediate challenge than headline economic growth figures suggest.
The data point to an economy in which businesses may be expanding selectively while households remain reluctant to spend, leaving the durability of any recovery uncertain.
