Consumer confidence gets a boost in May
People are starting to take a less negative view of the general financial situation of the UK and looking to make big purchases, although consumer confidence levels remain “historically low”.
Consumer confidence returned to growth in May despite ongoing economic and political upheaval causing continuing uncertainty over Brexit.
Although still very much in negative territory, GfK’s consumer confidence index increased by three points in May to -10, up from -13 in April. However, this is still lower than the -7 recorded for the same period last year.
The three-point boost has been helped by people feeling more positive about measuring including their personal financial situation,and taking a less negative view of the general financial situation of the UK.
People’s feeling about their personal financial situation over the last 12 months and next 12 months were up four points and five points respectively compared to April.
Feelings about the general economic situation over the past 12 months were flat on the month but fell six points compared to a year go. There is much more optimism about the economy over the next year, with the measure up five points compared to April, although this is down eight points year on year.
“These positive developments are not enough to get us back into overall positive territory because the measures on the general economy at -30 and -29 and are very low by historic standards. But at least we can see a willingness among consumers to adopt a more positive outlook,” says Joe Staton, client strategy director at GfK.
“But there’s still that divide between the way we view our personal situations and the way we look at the bigger world out there. People are happy with their own circumstances but simply don’t know what to make of the world at large. Can we blame them? On the Brexit front, they have probably seen so many twists and turns that they feel numb and that’s why they are still giving a big thumbs down for what the economy holds in store for us.”
The major purchase index shows people were also more likely to make a big purchase, such as furniture or electrical goods. This measure was up two points to a score of one. However, a four-point increase on the savings index suggests consumers are thinking about their cash more carefully in the longer-term.
