UK consumer confidence rises but is still fragile says GfK

By

Sandra Halliday

Published
Mar 29, 2018

With all the grim news surrounding UK retail at the moment you could be forgiven for assuming that British consumers are felling, well, grim. But not so, according to the researchers at GfK.

Its latest consumer sentiment report showed that Britons were surprisingly more optimistic than expected during March. It doesn't mean that they're feeling like popping the champagne corks, but the mood was definitely better than it could have been.

The Consumer Confidence Index rose three points to land at  -7 in March and all five of the measures saw higher values, which is really important for the retail sector as it desperately needs consumers to loosen their purse strings and start spending, especially on fashion.

Importantly, the Major Purchase Index increased two points this month to +2. OK, that’s four points below the March 2017 reading, but at least it shows shoppers prepared to spend, and to spend on larger items.

The index covering changes in personal finances in the last 12 months rose three points this time to +3, a single point higher than this time last year. And the forecast for personal finances over the next 12 months rose five points to +10, seven points higher than a year ago.

But while consumers are personally feeling better, they don't seem so upbeat about the state of the country. The measure for the General Economic Situation of the country in the last 12 months may have increased three points but it only reached -26, that's a whole five points lower than March 2017.

And expectations for the General Economic Situation in the 12 months ahead may have risen four points this month, but at -22, it’s two points lower than a year ago.

Meanwhile, the Savings Index rose a single point to +13 in March, which is 14 points higher year-on-year and underlines that consumers are still feeling cautious to a certain extent, many preferring to stash their cash away rather than splurging in the shops.

Joe Staton, Head of Experience Innovation UK at GfK, said:  “The prospect of wage rises finally outstripping declining inflation, high levels of employment with low-level interest rates, and finally some movement on the Brexit front appear to have boosted our spirits. It’s still a little early to be talking about green shoots, and the core score is of course still negative, but this is definitely a movement in the right direction. Consumers are feeling a tiny spring in their step – let’s see next month if April showers dampen the mood.”