UK consumer confidence continues to strengthen - GfK

23rd May 2024 07:40

(Sharecast News) - UK consumer confidence sparked in May, a long-running survey showed on Friday, as households become more upbeat about the economy and their finances.

The latest GfK consumer confidence index, published on Friday, rose two points in May to -17.

Within that, expectations for the general economic situation over the next year increased by four points to -17. The forward-looking personal finance situation also jumped, up five points to 7.

The only sub-measure that fell was the major purchase index, which dipped a point to -26.

Joe Staton, client strategy director at GfK, said: "With the latest drop in headline inflation and the prospect of interest rate cuts in due course, the trend is certainly positive after a long period of stasis which has seen the overall index score stuck in the doldrums.

"All-in-all, consumers are clearly sensing that conditions are improving. This good result anticipates further growth in confidence in the months to come."

However, Staton added that the dip in the major purchase index "reinforces the fact that the cost of living crisis is still a day-to-day reality for all of us".

Consumer confidence has been hit hard in recent years, undermined by surging inflation, rising interest rates and the cost of living crisis.

However, with inflation now standing at 2.3%, the Bank of England is widely expected to cut interest rates this summer.

Following multiple rises, the cost of borrowing has now been left on hold at a 16-year high of 5.25% since August 2023.