UK consumer confidence improved in April as falling inflation helped boost consumer optimism about their personal finances.
The latest GfK Consumer Confidence Index rose two points to -19, marking an improvement from -21 points in both March and February.
While its major purchase index also strengthened, up 2 points at -25.
GfK client strategy director Joe Staton said: “While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April.
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“These improvements reflect the impact on household budgets of lower inflation, and the anticipation of further tax cuts.
“However, we are a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine. There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges.”
KPMG UK head of consumer, retail and leisure Linda Ellett added: “While it’s welcome to see confidence levels rising, households are still feeling squeezed, so it’s not yet equating to a consistent and significant upturn in consumer spending.
“Of the 3000 consumers recently surveyed by KPMG about Q1 2024, only 3% said they had been able to increase their discretionary spending. And half of the group said they’ve had to cut their spend further since 2023 ended due to their household essential costs. A quarter with savings are using them to help meet essential costs, or plan to pay down their mortgage. This is limiting intention to spend savings on big ticket purchases, bar holidays and home improvements.
“Whether an economic upturn changes that remains to be seen, but consumers told us they are four times more likely to save than spend should their current costs ease.”
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