Consumer confidence has jumped five points this month to -22 as the UK “moves out of its feelings of despondency”, data released today has shown.
The GfK UK Consumer Confidence Index revealed that four of its five measures had been a rise over the month, with the measure for personal finances during the last 12 months increasing by four points to -20, three points up on May 2012.
Expectations for personal finances over the coming 12 months grew two points to -5, up four points on the same period last year.
In terms of the general economic situation over the last year, consumer confidence has leapt nine points to -44, 14 points higher than last May while expectations over the next 12 months have increased eight points on last year, reaching -18.
During the month, the major purchases measure stayed the same at -25, seven points higher than last year while the savings index rose two points to -21, a five point drop on may 2012.
Nick Moon, Managing Director of Social Research at GfK, welcomed the figures though warned the economic climate remains fragile.
“There are now some real signs that consumers, while hardly confident, are moving out of the feeling of despondency that the country has been mired in for the last year or so,” he said.
“The current figure of -22 is fully 7 points higher than in any month of 2012, other than the -22 observed in November which we have to assume was a “blip”.
“But before we get too carried away, we should note that even after this rise, the Index is still lower than it was for the whole of 2010, and massively worse than it was for an entire decade from 1997 to 2007.
“We may be climbing out of the pit of economic pessimism, but there’s a long way to go until the public becomes neutral, let alone positive.”
Analyst firm Capital Economic agreed, noting that the sharp rise may be difficult to sustain in the months ahead.
“May’s strong rise in the level of consumer confidence will raise hopes that the nearterm outlook for consumer spending has brightened.,” said Michael Pearce, Assistant Economist at the firm.
“But May’s reading was boosted by some temporary factors, and with both employment and earnings contracting, we doubt that confidence can continue rising from here.”