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Consumer confidence in finances grows for third month in a row

Consumer confidence in finances grows for third month in a row
Matt Browning
Written By:
Matt Browning
Posted:
21/06/2024
Updated:
24/06/2024

Confidence in the UK’s financial position continued to grow in June, as inflation dropping gave hope to some households, research reveals.

As the economic picture looks brighter for many, the mood of Brits increased by three points last month, according to the Consumer Confidence Index by Gfk.

It brought the total points to -14 for June, which is a rise from -24 last year.

While respondents are feeling better about the general economic situation in the UK in the next 12 months, which was up by 6 points to -11, many are not as optimistic about their own situation.

This is because consumer confidence in personal finances dropped among the 2,000 adults surveyed by three points, standing at +4, while the feeling in the previous year remained the same as in May’s index.

However, in June 2024, there was less faith in personal finances looking ahead to the next year, with a score of -1 recorded on the index.

The index asks respondents to rate their situation in the previous and upcoming 12 months as a lot better, a little better, stayed the same, or a little or a lot worse.

As the outlook improved, people were more inclined to make a ‘major’ purchase, like furniture or a TV. But when asked whether now was a good time to start saving, the general optimism waned, with the score dropping to +22.

The mixed emotions about people’s money came during the month when the base rate held firm at 5.25% and inflation finally fell to the Bank of England’s goal of 2%.

This explains the public sentiment towards their personal finances, which will be impacted by the higher base rate.

‘Consumer confidence remains robust’

Joe Staton, client strategy director of GfK, says the overall improvement was “bolstered by consumers’ more sympathetic view of the economy for the last year and the 12 months to come”.

Staton said: “Those measures on the economy registered sharp increases of seven points and six points respectively, and there was a welcome three-point boost in intentions to make major purchases.

“While June’s reading of -14 is the third month in a row that confidence has increased, the headline score remains negative owing to the difficulties so many have experienced as the unrelenting cost-of-living crisis batters household budgets.”

Staton added: “Nevertheless, consumer confidence continues its robust long-term upward trend this month, and has recovered significantly since the record low of -49 reached in September 2022. Consumers like financial certainty, and this has to be the cornerstone if we are to see confidence break out into positive territory.”