UK consumer confidence is on a 12-year high according to researchers at GfK. Low inflation, falling employment and rising wages have boosted UK households’ positivity.
This months’ consumer confidence marks the highest since 2002, standing at an index score of 4 between March and April of this year. With zero inflation and rising incomes, GfK’s survey of 2k people showed shoppers remain optimistic about the next 12 months.
The survey showed that Brits had a slightly better view of the economy’s climate and their personal finances over the previous 12 months. Overall consumer confidence has risen since 2010, when the Conservative government came into power.
Nick Moon, MD of social research at GfK, commented, “On the one hand, there is no continuing momentum -– the index has not risen since last month -– while on the other hand the index is standing at a far higher point than when the government came to power. We haven’t seen the scores of the past two months since September 2002.”
The European commissioner reports that despite consumer morale being on a slow increase, the readings are much higher then when they stood at -13 five years ago due to high inflation and a fragile economy recovery.
Regardless of the disturbance the upcoming election are anticipated to have on UK consumer confidence, household income is increasing and inflation remains at zero since February – consumers are finding that they have more money to spend.
However, the survey also showed that people are holding onto their savings instead of splashing out on big consumables. Another recent survey by Makrit outlined that UK consumers were using the extra cash to pay off debts rather tan go on a spending spree.
The economy’s growth had slowed down sharply in the first three months of this year and a separate consumer confidence survey from polling firm YouGov and economic consultancy CEBR published on Wednesday suggested morale fell for the first time since December.
Many economists expect the figure to turn negative in the first half of this year, driven by the fall in oil prices and commodities.
By Natalie Whitmore