UK shopper confidence strengthened in August, with shoppers signalling greater willingness to spend as pressure on household finances showed signs of easing.

The latest BRC-Opinium Consumer Sentiment Monitor found expectations for the UK economy over the next three months improved to -28 in August, up from -36 in July.

Consumers were also slightly more optimistic about their own finances, with the measure for personal financial expectations climbing to -9 from -12.

The improvement could provide a boost for supermarkets and food retailers, with expectations for personal retail spending rising sharply to +8 in August from just +1 the previous month.

Overall spending intentions also increased to +15 from +13, although expectations for personal saving slipped slightly to -5 from -4.

British Retail Consortium chief executive Helen Dickinson said consumer sentiment had continued to recover, with confidence in the economy reaching its highest level since the lows seen at the start of the Iran conflict.

She said: “Expectations for personal finances saw a small improvement, driven by an optimistic Gen Z. This same generation also reported a bump in spending plans.”

The stronger spending outlook comes as grocery retailers continue to compete heavily on price and value amid sustained pressure on household budgets.

Dickinson warned that rising business costs could threaten the improvement in consumer sentiment by feeding through into higher prices for food and other essentials.

“Retailers compete fiercely to keep the cost of food and essentials down, yet mounting regulatory and tax burdens risk pushing prices higher,” she said.

She urged the Government to use the upcoming Budget to reduce costs facing retailers, including energy bills and business rates.

“If the government can reduce retail business costs, from energy bills to business rates, it will be ordinary households who feel the benefit,” Dickinson added.

The findings are based on a survey of 2,000 UK adults carried out by Opinium for the BRC between 4 and 7 August.

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