08 May 2024

Fresh data reveals a two-point improvement in UK consumer confidence for April, with sentiments towards personal finances for the upcoming year holding steady.

GfK's consumer confidence barometer indicates a rise to -19 for the month, with four measures showing improvement and one remaining unchanged compared to the previous month's assessment. The survey, encompassing a sample of 2,009 individuals, was conducted from April 2nd to April 15th.

The index tracking changes in personal finances over the past year saw a two-point increase to -11, while the outlook for personal finances in the next 12 months remained unchanged at 2, marking a 15-point surge from the previous year.

Additionally, the report notes a four-point increase in the measure gauging the general economic situation of the country over the past 12 months, reaching -41, which is 14 points higher than in April 2023. Expectations for the general economic situation in the next year also rose by two points to -21, reflecting a 13-point increase from the previous year.

Meanwhile, the major purchase index climbed two points to -25, marking a three-point increase compared to the same month last year, while the savings index saw a modest one-point increase to 26 in April, representing a seven-point improvement.


“While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April," Joe Staton, client strategy director GfK, said. "These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.


"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.”


In response to the data on Friday, Linda Ellett, UK head of consumer, retail and leisure for KPMG, said: “While it’s welcome to see confidence levels rising, households are still feeling squeezed, so it’s not yet equating to a consistent and significant upturn in consumer spending.


“Of the 3,000 consumers recently surveyed by KPMG about Q1 2024, only 3% said they had been able to increase their discretionary spending. And half of the group said they’ve had to cut their spend further since 2023 ended due to their household essential costs. A quarter with savings are using them to help meet essential costs, or plan to pay down their mortgage. This is limiting intention to spend savings on big ticket purchases, bar holidays and home improvements.


"Whether an economic upturn changes that remains to be seen, but consumers told us they are four times more likely to save than spend should their current costs ease.”

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