Despite the continuation of soaring inflation, GfK’s long-running consumer confidence index has risen for the third month in a row. However, it remains firmly in the negative territory, with analysts noting that the UK is still a long way from emerging from its current state of economic gloom.
The index increased six points to -30 in April, with all measures up in comparison to last month’s announcement.
Joe Staton, Client Strategy Director GfK, said: “As food and energy prices continue to rise, and inflation eats into wages, the cost-of-living crisis is a painful day-to-day reality for many. But are all consumers buckling under the pressure? On the evidence of April’s confidence figures, the answer is no. Instead, there’s a sudden flowering of optimism with big improvements across the board.”
He highlighted the eight-point improvement in how people view their personal financial situation in the year ahead and the brighter outlook on the general economy. Moreover, the Major Purchase Index is higher than it has been for a year, bringing hope to retailers heading into the summer.
Staton concluded: “This is the third month in a row that confidence overall has improved; can we look forward to this momentum building for the year ahead?”
James Smith, a developed markets economist at ING, suggested there were early signs of an economic recovery, pointing to the uplift in consumer confidence and hopes that pressure on real wages will ease over the coming months.
“That suggests the worst is behind us for the UK high street,” he said. “Admittedly, none of this points to a rapid rebound in retail activity but is another piece of the jigsaw that suggests the UK economy will dodge a technical recession in the first half of the year.”
NAM Implications:
- Cautious optimism, fingers crossed…
- With additional pressure yet to emerge from the pipeline for some.
- Therefore essential to determine whether your key consumers are ‘Them’ or ‘Us’, going forward…
