Consumer confidence continues to recover despite rising cost of living – survey
According to a long-running survey, consumer confidence will continue to recover in the coming year despite ongoing pressure on the cost of living.
GfK’s consumer confidence index rose three points to minus 27 in May, the fourth straight monthly increase from minus 45 in January.
Confidence in personal finances posted a “robust” five-point rise over the next 12 months to minus 8 — 17 points up from this time last year.
Expectations for next year’s broader economy rose four points and remain well down from minus 30, but 26 points higher than in May last year.
The bulk purchase index, an indicator of confidence in buying large items, also rose four points to minus 24, up 11 points from a year ago.
Joe Staton, director of client strategy at GfK, said: “The cost of living crisis has long been part of our daily financial reality, with double-digit inflation and record high food prices.”
“But despite this pressure, May sees an encouraging three percentage point rise in consumer confidence.
“While Brits have little control over the broader economy, it is good that people’s assessments of their personal finances continue to improve over the next 12 months, with a sharp rise of five points to minus 8.”
“This measure reflects most clearly our hopes and fears for the year ahead and underpins our ability to spend on the goods and services that fuel our economy.
“Of course, the headline reading of minus 27 means we are still deep in negative territory and far from a ‘sunny high country’. However, the overall trend this year is positive and perhaps reflects a stronger financial picture across the UK than many would think.
“But everyone has to persevere because it could still be a rocky road out of these difficult times.”
Linda Ellett, UK head of hypermarkets, retail and leisure at KPMG, said: “Consumer confidence continues to resist higher inflation and rising interest rates, but also increases in key household essentials such as a mortgage or rent Energy continue to determine how the Consumers are thinking about their prospects for 2023.
“The essential cost continues to determine whether consumers need to take action to save money elsewhere in their budget. For example, so far this year, a third of consumers surveyed by KPMG say they have switched to lower-priced retailers, while nearly 40% are buying higher quality or private label products.
“Certainty about key costs has and will continue to drive savings and spending plans for the remainder of 2023. A third of consumers KPMG spoke to about savings say they use it to cover their essential expenses. But the remaining two-thirds are willing to make larger purchases later in the year.”
https://www.standard.co.uk/business/business-news/consumer-confidence-continues-to-recover-despite-living-cost-pressures-survey-b1082222.html Consumer confidence continues to recover despite rising cost of living – survey
