A highly-regarded consumer confidence monitor has indicated that it is “surprisingly stable” in the UK, as the country embarks on a tumultuous period with the upcoming General Election and Brexit negotiations.
The GfK Consumer Confidence Index dropped one point to -7 in April, with no sign of any downturn as predicted once Article 50 was triggered.
“In the face of widespread reports of rampant inflation, stagnating wages and anxiety over our borrowing binge, UK consumer confidence is surprisingly stable,” GfK head of market dynamics Joe Staton said.
“Although the Overall Index Score remains in negative territory and has dipped this month, we have not seen any evidence of the predicted post-trigger downturn, despite high levels of concern about the general economic situation of the country.
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“Consumers continue to remain positive about the state of their personal finances and even report that now is a good time to buy.”
GfK’s figures showed a one point increase in the major purchase index to seven, two points higher than this time last year and an indication of consumer confidence in buying big ticket items.
However, the confidence in personal finances and for the general economic situation over the next 12 months both decreased by one point.
“Is this simply the calm before the storm? Is pre-Brexit economic turbulence yet to really batter households? That threat cannot be ruled out,” Staton said.
“But for the moment, consumer sentiment remains relatively buoyant as we enter our two-year window of renegotiation and navigate the run-up to the General Election.”
The survey comes as amid mixed reports of retail sales.
This week, a CBI Distributive Trades Survey of 112 firms reported faster-than-expected growth in sales volumes.
Fifty-nine per cent of retailers said sales volumes were up in April on a year ago, while 21 per cent said they were down, giving a balance of 38 per cent growth – the highest figure since September 2015’s 49 per cent.
However, this is in stark contrast the Office for National Statistics, which last week reported that retail sales have recorded their biggest fall for seven years in the three months to March due to a rise in the cost of living.