Consumer confidence in the UK increased this month as sentiment about the economy improved, although the outlook remains fragile due to the turmoil in the Middle East and concerns around inflation.
GfK’s Consumer Confidence Index increased by two points to -18 in June, with two of the measures up and three unchanged compared with last month.
Commenting on the marginal improvement in consumer confidence, Neil Bellamy, Consumer Insights Director at GfK, said: “This is driven by improvements in how consumers see the general economy, with scores up three points (looking at last year) and up by five points (looking at the next 12 months). Consumers have been resolute in their views on their wallets, with June’s personal financial situation scores (past and future) unchanged from May.”
He went on to say: “Yet confidence is still fragile because the dark shadow of inflation is a day-to-day challenge for so many of us. With petrol prices set to rise in the coming weeks following the escalation of the conflict in the Middle East, and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers. With so much volatility, now is certainly not the time to hope for the proverbial ‘light at the end of the tunnel’.”
Data released today by the Office for National Statistics (ONS) shows that retail sales in the UK suffered their steepest drop in 18 months last month as consumers cut back on purchases of food and household goods.
NAM Implications:
- i.e plenty of inflation drivers in the pipeline…
- …and keeping in mind the extent to which consumers are driven by perception…
- …we must inch forward with fingers crossed.
- Unless you know something we don’t?
