UK consumer confidence hits highest level since April 2022

UK shopper confidence rebounded in February to its highest stage in nearly a yr, in an indication of households’ resilience regardless of the price of dwelling disaster, in response to knowledge revealed on Friday.

Analysis group GfK stated its index of shopper confidence, a intently watched measure of how individuals view their private funds and wider financial prospects, rose by seven factors to -38.

Beating consensus forecasts of -43, that’s the highest studying since April 2022 for the index, which fell to a near-record low in January. The measure remained nicely beneath zero, nonetheless, indicating that the majority respondents reported a decline in confidence.

Joe Staton, GfK’s consumer technique director, stated that though February’s rating was “nonetheless severely depressed”, customers had “all of the sudden proven extra optimism concerning the state of their private funds and the final financial scenario, particularly for the approaching yr”.

Respondents to the survey, primarily based on interviews performed between February 1 and 13, have been extra optimistic concerning the yr forward, because the sub-index measuring their common outlook on the long run financial scenario jumped by 11 factors between January and February.

Customers additionally reported recovering confidence of their private funds, in addition to a rising willingness to make costly purchases.

The financial savings index, which measures how seemingly customers are to place away cash however will not be included within the general rating, elevated from 14 to 19 — a stage 5 factors larger than in February final yr.

The uptick throughout all 5 measures included within the general index prompt that customers may expertise “a milder recession than the pundits predicted”, stated Staton.

The survey follows a string of encouraging official knowledge, displaying that the UK averted a contraction within the remaining quarter of 2022, whereas the labour market remained resilient regardless of financial headwinds.

Headline inflation declined to 10.1 per cent in January, down from its 41-year peak of 11.1 per cent in October, the Workplace for Nationwide Statistics stated final week.

In the meantime, the general public funds registered a shock £30bn windfall within the fiscal yr to January, the ONS stated on Tuesday, gifting chancellor Jeremy Hunt scope to supply additional assist to households in his spring Price range on March 15.

Total, shopper confidence in February was 12 factors decrease than in the identical month in 2022, as hovering vitality payments and better rates of interest and meals costs squeezed family budgets over the previous 12 months.

“[Consumer] temper in addition to the economic system stay a good distance off pre-lockdown ranges,” stated Staton, “however a bit of shopper resilience could be what we have to soften any downturn in 2023.”

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