According to data company GfK, the UK consumer confidence has made another significant improvement in April. This is despite the impact of rising food and energy prices, as well as inflation affecting wages. Surprisingly, there seems to be a sudden surge of optimism among consumers, which is reflected in the overall consumer confidence index score. The score has increased by an impressive six points this month, reaching a reading of -30. This positive development marks the third consecutive rise in consumer confidence this year.
One particular area where improvement is observed is in how consumers perceive their 12-month prospects for their personal financial situation. It has seen a notable eight-point jump, settling at -21. Although this is two points worse than April 2022, it is an indication that household finances may be stronger than previously anticipated. Moreover, even though the General Savings Index has decreased by two points this month to +19, it still remains nine points higher than the same period last year.
The outlook for the general economy has also experienced a noteworthy improvement with a six-point increase to -34 compared to April 2022. This represents a substantial 20-point improvement since January and could potentially be viewed as the first signs of economic recovery. Lastly, the Major Purchase Index has reached a reading of -28, which is four points higher than it has been in the past year. This brings a much-needed sense of optimism for retailers as we head into the summer season.
Despite the ongoing challenges presented by the escalating prices and inflation, consumers in the UK are displaying growing confidence in their personal financial situations, the overall economy, and their ability to make major purchases. This positive trend indicates a burgeoning optimism among consumers that has the potential to drive economic recovery in the upcoming months.
Useful links:
1. GfK Insights
2. Government news on driving economic recovery
