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Economy

Consumer confidence edges up alongside reopening

Most notably, expectations for the general economic situation over the coming 12 months improved by six points to -11

GfK’s consumer confidence UK Consumer Confidence Index increased one point to -15 in April as the retail sector reopened.

Two measures were up in comparison to the March 19 announcement, one was flat and two measures were one point down. GfK found that the index measuring changes in personal finances over the last 12 months is down one point at -3; however this is still one point better than April 2020, whereas the forecast for personal finances over the next 12 months is the same as last month at +10; 24 points higher than this time last year.

In addition, it found that confidence for the general economic situation of the country during the last 12 months is up two points at -58; but remains 14 points lower than in April 2020. However, most notably, expectations for the general economic situation over the coming 12 months improved by six points to -11; this is 45 points higher than April 2020.

Interestingly, as stores reopened the Major Purchase Index was found to have decreased by one point to -12 in April; but is still 40 points higher than it was this month last year. Finally, GfK found that the Savings Index was up by one point to +22 – 17 points higher than this time last year.

Joe Staton, Client Strategy director GfK, said: “Confidence has edged up one point in April, with the picture for personal finances in the coming year remaining strong at +10. There is also another big uptick in our view of the general economic situation in the next 12 months, which has improved six points in April, building on the previous 13-point increase in March and 14-point jump in February.

“This clear trend of growing confidence reflects the forecast of a rebound for the UK’s economy during the second half of the year. The improvement in the consumer mood since January is welcome, but the pandemic has hit household finances hard and, on the road ahead, we will still see potential concerns over new variants, rising inflation and the debt overhang.”

He added: “Nevertheless, there’s every chance that, as the recovery gains momentum and the numbers get stronger, confident consumers will continue to spend and drive the wheels of UK finances into the summer and beyond.”

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