BUSINESS LIVE: Consumer confidence improves as retail sales grow

Samantha Phillips, partner at McKinsey & Co:

‘Looking ahead to the golden quarter, the next three months will be pivotal. Consumers are likely to spend cautiously with high winter energy bills in mind.

‘And retailers will need to stay in tune with the functional and emotional needs of their customers.

‘It will be important to monitor where consumers are willing to make trade-offs and where they are willing to stretch their budgets and spend. Those that can use these insights to inform product availability, pricing and promotions will be better placed to capture a greater share of the customer’s wallet.’

Neil Birrell, chief investment officer at Premier Miton investors:

‘UK retail sales figures for August came in much as expected which will please the Bank of England after its decision to keep interest rates unchanged yesterday.

‘With inflation coming in below expectations earlier in the week, strong consumer spending would not have been welcome.

‘The UK economy appears to in reasonable shape given everything that is being thrown at it and sharp eyes will remain on the data as we monitor the impact of all the interest rate increases we have seen.’

Fresh data shows UK consumer confidence has improved to its strongest since the start of 2022, while separate figures show retail sales ticked higher last month thanks to better weather conditions.

The GfK consumer sentiment indicator rose for a second month in a row to -21 in September, the highest since January last year, from -25 in August although it remained below the average of -10 for the survey, which has been running since 1974.

Economists had forecast a fall to -27.

Meanwhile data from the Office for National Statistics shows UK retail sales grew 0.4 per cent in August, just missing forecasts of 0.5 per cent growth.