This from an examiner:
An examiner who sees a candidate exhibit common courtesy in a safe manner will be pleased that he/she has a real driver next to them who can multi-task and show empathy for other road users. If you just blank others, the examiner may indicate thanks on your behalf, and will wonder whether you're up to the job of multi-tasking or even aware of your surroundings.
A simple "thank you" can be shown to any other driver by any means that doesn't compromise control of the car.
DO:
Say 'Thank you' to those who deserve thanks
Raise your fingers off the wheel when not steering while keeping your palm on the wheel
Emote thanks in another way such as nodding, or smiling, or both, if your hands are busy.
DON'T:
Take hands completely off the wheel to say thanks
Use any hand gesture while steering, indicating, operating ancillary controls or changing gear
Lose control of the car while trying to be over-polite
Flash your headlights to say thanks; it's against the Highway Code and VERY annoying at night. It will also be marked as a fault.