Consumer confidence in the UK has shown signs of improvement for the second consecutive month in March, marking a positive shift after a period of decline since last autumn. However, it is important to note that the Consumer Confidence Index still remains in negative territory. The long-running index, conducted by GfK, increased by two points this month, reaching -36. This follows a significant seven-point increase in February. While this increase may be seen as a step in the right direction, GfK has cautioned that it does not fully reflect the ongoing concerns consumers have about their personal financial situations.
The March index revealed that three measures displayed improvement, one remained unchanged, and one experienced a decline compared to the previous month. The index measuring changes in personal finances, which is considered a precise indicator of the nation’s financial well-being, remained stagnant over the past 12 months with a reading of -26. This is a significant drop of 13 points compared to March of the previous year.
The forecast for personal finances over the next 12 months also saw a decline of three points, reaching -21, which is three points lower than the same period last year. Conversely, the measure for the general economic situation of the country in the past 12 months experienced an increase of three points, reaching -62. However, this is still 11 points lower than March 2022. Expectations for the general economic situation over the next 12 months also improved by three points, reaching -40. This shows a nine-point increase from March of the previous year.
The major purchase index saw a four-point increase this month, reaching -33. However, it is important to note that this is still nine points lower than the previous year. On the other hand, the savings index witnessed a two-point increase, reaching +21. This is three points higher than the same time last year, indicating that consumers are prioritizing saving their money rather than spending it.
Joe Staton, the Client Strategy Director of GfK, emphasized that while the recent budget may bring relief to certain sections of the population, numerous individuals are still facing financial hardships. The primary concern for consumers across the UK remains having enough money for day-to-day living expenses and bill payments.
The rise in consumer confidence presents a positive sign for the UK economy as it seeks to recover from the impacts of the ongoing pandemic. However, the lingering concerns about personal finances indicate that there is still a long way to go before consumers return to their pre-pandemic spending habits. In order to foster a sustainable economic recovery, it is crucial for the government and businesses to continue supporting individuals and families.
(Useful links:
– The Guardian: UK consumer confidence steadies amid pandemic worries
– BBC: UK consumer confidence rises ‘significantly’)
