Rate cuts boost UK consumer confidence, but sentiment still subdued

(Sharecast News) - Consumer confidence in the UK was given a boost in February by recent interest-rate cuts, but views on household finances still remain subdued. The S&P Global UK Consumer Sentiment Index published on Monday, which tracks household financial wellbeing, labour market conditions, household spending, savings and debt, rose to 45.4 this month.

This was up from January's 12-month low of 43.6, but still the second-lowest level seen over the past 10 months.

The survey was conducted after the Bank of England's most recent reduction in interest rates - policymakers cut the Bank Rate by 25 basis points to 4.5% on 6 February following a similar cut in November - with mortgage holders in particular reported a brightening of their future financial prospects.

However, Chris Williamson, chief business economist at S&P Global Market Intelligence, said confidence "remains in the doldrums" compared with the strong uptick last year before the autumn budget and gloomy government rhetoric dampened sentiment.

"Households remain worried about their finances, with savings falling and income from employment showing the second weakest rise since June 2024," Williamson said.

"Job market worries also remain widespread, with February seeing job insecurity prevail for a second month running, contrasting sharply with the record level of job security recorded in the middle of last year."