UK consumer confidence hits highest level since April 2022

UK shopper confidence rebounded in February to its highest degree in nearly a 12 months, in an indication of households’ resilience regardless of the price of residing disaster, in line with knowledge revealed on Friday.

Analysis group GfK stated its index of shopper confidence, a carefully watched measure of how individuals view their private funds and wider financial prospects, rose by seven factors to -38.

Beating consensus forecasts of -43, that’s the highest studying since April 2022 for the index, which fell to a near-record low in January. The measure remained effectively under zero, nevertheless, indicating that almost all respondents reported a decline in confidence.

Joe Staton, GfK’s consumer technique director, stated that though February’s rating was “nonetheless severely depressed”, shoppers had “immediately proven extra optimism concerning the state of their private funds and the overall financial scenario, particularly for the approaching 12 months”.

Respondents to the survey, based mostly on interviews carried out between February 1 and 13, had been extra optimistic concerning the 12 months forward, because the sub-index measuring their common outlook on the longer term financial scenario jumped by 11 factors between January and February.

Shoppers additionally reported recovering confidence of their private funds, in addition to a rising willingness to make costly purchases.

The financial savings index, which measures how doubtless shoppers are to place away cash however isn’t included within the general rating, elevated from 14 to 19 — a degree 5 factors increased than in February final 12 months.

The uptick throughout all 5 measures included within the general index urged that customers would possibly expertise “a milder recession than the pundits predicted”, stated Staton.

The survey follows a string of encouraging official knowledge, displaying that the UK averted a contraction within the last quarter of 2022, whereas the labour market remained resilient regardless of financial headwinds.

Headline inflation declined to 10.1 per cent in January, down from its 41-year peak of 11.1 per cent in October, the Workplace for Nationwide Statistics stated final week.

In the meantime, the general public funds registered a shock £30bn windfall within the fiscal 12 months to January, the ONS stated on Tuesday, gifting chancellor Jeremy Hunt scope to offer additional help to households in his spring Finances on March 15.

General, shopper confidence in February was 12 factors decrease than in the identical month in 2022, as hovering vitality payments and better rates of interest and meals costs squeezed family budgets over the previous 12 months.

“[Consumer] temper in addition to the economic system stay a good distance off pre-lockdown ranges,” stated Staton, “however somewhat shopper resilience could be what we have to soften any downturn in 2023.”

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