The most recent report on UK consumer confidence has indicated that overall confidence has remained static in March, with no change from the previous month. However, the report also highlighted a positive shift in attitudes towards personal finances.
According to the consumer confidence report by GfK, the index remained at -21 points in March, the same as February and a decline from -19 points in January. Although January saw the highest reading in over two years due to optimism about falling inflation, the confidence level has now reverted.
The major purchase index, which measures the willingness of British consumers to make significant purchases, also experienced a decrease of two points. Despite the overall stagnation, there was an increase in the forecast for personal finances over the next 12 months, with a rise of two points.
Joe Staton, Client Strategy Director at GfK, noted that the improved measure for personal finances was a positive development, marking the first positive score since December 2021. He acknowledged the financial challenges faced by Britons, such as fiscal drag, higher fuel costs, rising council taxes, and utilities expenses, which have eroded any income increases.
Staton also expressed concerns about the future trajectory of consumer confidence. He observed that the improvements seen in consumer confidence over the past year seemed to have disappeared, raising important questions for the future health of the economy. As the UK approaches the next General Election, these questions gain even more significance.
There is optimism that obstacles hindering consumer spending, such as high energy bills and inflation, will improve in the coming year. The UK recently emerged from a recession in January, with the economy experiencing a modest growth of 0.2 per cent. Additionally, inflation has decreased to its lowest level in nearly two and a half years, offering some relief to consumers facing financial pressures.
As the UK navigates through economic uncertainties, the stability of consumer confidence plays a crucial role in shaping the country’s financial landscape. With the hopeful signs concerning personal finances, there is a possibility of regaining the lost momentum in consumer confidence. However, the future path remains uncertain, and it is essential to closely monitor the evolving economic conditions.