UK consumer confidence for August rises by 5 points to -7

GfK's consumer confidence index for August has risen five points to -7. This is said to be the best monthly rise since June 2015. The index is an economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. It studies the spending and saving intention of customers.

This is a sharp improvement over last month, when the consumer confidence saw its steepest fall in 26 years post the Brexit vote. The index had fallen to -12 in July.

Joe Staton, head of market dynamics at GfK said that the index was seeing some recovery this month "as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK". He further explained that historic low interest rates, declining prices and high levels of employment helped boost confidence among UK consumers.

"This can be seen in positive growth across all major measures including both our Personal and General Economic situation for the next 12-months. And at +7 points (a jump of nine points from last month), the Major Purchase Index reflects strong retail figures. But more remarkable is the 16-point collapse in the Savings Index (down from +1 last month to -15). We Brits are clearly determined to carry on shopping for today rather than saving for tomorrow," Staton said in a statement.

It was also noted that all measures used to calculate the index had increased. For instance, the index that measures changes in personal finances over the last 12 months saw an increase of one point to zero. This was three points lower than August 2015.

Also, the measure for General Economic Situation in the country over the last 12 months saw an increase of two points to -23 for August. The Major Purchase Index increased nine points from -2 to seven in August, while Savings Index came in 16 points lower to -15.