UK consumer confidence rebounds to highest level since April 2022

UK consumer confidence has bounced back in February to its highest level in almost a year, demonstrating consumers' resiliency in the face of the cost of living issue. According to the report published by Research group GfK, its index of consumer confidence rose by seven points to -38. The index, which dropped to close to a record low in January, reached its best score since April 2022, surpassing consensus expectations of -43. As per the report, though the personal finances during the last 12 months was 15 points worse than Feb 2022, the forecast over the next 12 months increases by nine points to -18. This is four points lower than last year. The expectations for the general economic situation over the next 12 months are also up by 11 points to -43; this is the same score as February 2022. The major purchase Index was also up three points to -37; this is 22 points lower than this month last year. The savings index, which measures how likely consumers are to put away money but is not included in the overall score, increased from 14 to 19 — a level five points higher than in February last year. The report suggested that an uptick across all five measures included in the overall index suggested that consumers might experience a milder recession than predicted last month. Joe Staton, client strategy director at GfK said that despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year. “While it's too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. However he said that the headline consumer confidence score is still “severely depressed” and the mood as well as the economy remain a “long way off pre-lockdown levels”, but a little consumer resilience might be what we need to soften any downturn in 2023.”