UK consumers
High inflation is squeezing Britons' household finances Reuters

Consumer confidence in the UK stabilised in July after a sharp fall in the previous month, a survey has revealed.

The YouGov/Centre for Economics and Business Research (CEBR) consumer confidence index rose to 107.3 from 107.1 in June. A reading above 100 indicates more people are optimistic than pessimistic.

More from IBTimes UK

Despite the rise, this is the first time the index has remained below 108 for two consecutive months since the summer of 2013.

Consumer confidence had retreated sharply in June after Prime Minister Theresa May's Conservative Party unexpectedly lost its parliamentary majority in a snap general election on 8 June.

The improvement in consumer sentiment in July was attributed to more favourable views on job security over the past 30 days, as well as expectations for household finances over the next year.

However, consumers' assessment of their household finances fell for the fourth month in a row to its lowest level since December 2014, while expectations for house prices over the next 12 months fell to their lowest level in more than four years.

"Last week's relatively weak GDP figures point to the UK economy facing a tough test over the next year and these figures suggest that while the shock of the election result may have been absorbed, a lot of uncertainty remains," said Nina Skero, head of macroeconomics at the CEBR.

"What could be as troubling for many consumers over the coming year is the cooling off of property market expectations over the next 12 months – if house prices fall once again then tricky economic conditions would get even more difficult."

The UK economy expanded 0.3% in the three months to June following 0.2% growth in the previous quarter.

The Office for National Statistics said that growth was driven by the service sector during the second quarter, while performance in the construction and manufacturing sectors worsened.

Last week, the International Monetary Fund downgraded its forecast for UK economic growth this year to 1.7% from 2%.