Latest data suggests that falling inflation and tax cuts is helping to revive consumer confidence in the UK, although the delay in interest rate reductions is causing households to remain cautious.
GfK’s long-running Consumer Confidence Index increased two points to -19 in April. Four measures were up, and one stayed the same in comparison to last month’s announcement:
Joe Staton, Client Strategy Director GfK, noted that while the overall Index score remains negative, all five measures are significantly better than they were this time last year. “These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts,” he said.
“However, we are a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine. There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges, and revised views on when the Bank of England might cut borrowing costs. But Spring has arrived, and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction.”
