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Consumer confidence Index jumps three points but ‘far from sunny uplands’

Written by: Noora Ismail
British consumer confidence is growing but the country is still in 'negative territory' and will need 'resilience' to get through the current cost-of-living crisis.

Brits are more becoming more positive about their finances and the general state of the economy, according to research firm GSK.

It’s long-running Consumer Confidence Index saw an overall three-point boost over the last month indicating positivity despite inflationary challenges and soaring food prices.

The forecast for personal finances has increased by two points since May last year to -20, and outlook for the next 12 months is up 13 points  to -8.

The measure for  the general economic situation  has increased by 1 point since last month to -54, but is up by nine points since May 2022. Outlook for the next 12 months is better at 26 points higher than this time last year reaching -30 points.

The ‘major purchase index’ is at -24, 11 points higher than May 2022 and up four points since last month. The ‘savings index’ remains unchanged from last month at +19 points.

‘Hold on tight for a rocky ride’

Joe Staton, Client Strategy Director GfK, says: “The cost-of-living crisis has been part of our daily financial reality for a long time, with double-digit inflation and record-high food prices. But despite those pressures, May sees an encouraging three-point uptick in consumer confidence.

“While Brits have little control over the general economy, it’s good to see further improvement in how people view their personal finances. This measure most keenly reflects our hopes and fears for the coming year, and it underpins our ability to spend on goods and services that drive our economy. Of course, the headline score of -27 means we’re still deep in negative territory and a long way from any ‘sunny uplands.

“However, the overall trajectory this year is positive and might reflect a stronger underlying financial picture across the UK than many would think. But everybody must hold on tight as it could still be a rocky ride out of these tough times.”

Russ Mould, investment director at AJ Bell, added: “UK consumer confidence continues to be impressively resilient, good news for retail, travel and hospitality stocks, with the reading improving for the fourth month in a row. If inflation starts to retreat from double-digit highs that improvement may become more material.”

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