The GFK Consumer Confidence Index marks a modest improvement, climbing three points to -14, yet stays in negative territory.
- This marks the third consecutive month of increased consumer confidence, attributed to optimism about the UK’s economic outlook.
- Despite improvements, the unrelenting cost of living crisis continues to impact overall confidence, according to GFK’s client strategy director.
- While the personal financial situation index remains unchanged, there is a notable increase when compared to the previous year.
- Predictions for the UK economy show significant improvement, although the savings index has experienced a decline.
The latest GFK Consumer Confidence Index reveals a slight three-point increase in June, reaching -14, indicating a slight rise in consumer sentiment but maintaining its negative stance. This upturn represents the third consecutive monthly increase since March, fuelled by growing optimism about the United Kingdom’s economic trajectory. However, the overall index remains negative, primarily due to the unrelenting cost of living crisis that continues to pose significant pressure on household budgets.
Out of the five measures evaluated within the index, three have shown improvement, one has decreased, and one remained steady compared to the preceding month of May. Notably, the index measuring personal financial situations over the past year remained at -10, though this marks a five-point improvement over the same period last year.
The future outlook for personal finances has declined by three points to +4, yet this too is an improvement compared to June of the previous year. Meanwhile, views on the general economic situation have shown a substantial increase, rising seven points to -32, a 22-point leap compared to June 2023. Looking forward, expectations for the national economy over the next year demonstrate a significant improvement, predicting an increase of six points to -11, which is 14 points higher than the previous year’s forecast.
The major purchase index rose by three points to -23, which is slightly higher than the previous year. However, the savings index experienced a drop of five points, reaching +22, which is three points lower than the figures recorded this time last year. Commenting on these figures, Joe Staton, GFK’s client strategy director, highlighted the improved consumer outlook, acknowledging the sharp increases in economic perceptions and a modest rise in major purchase intentions.
Staton emphasised that, while the headline figure of -14 reflects the continuing challenges posed by the cost of living crisis, it also indicates a robust positive trend in confidence levels compared to the record low of -49 observed in September 2022. He noted the public’s preference for financial stability, which remains a critical factor for transitioning consumer confidence into positive territory.
The gradual recovery in consumer confidence reflects enhanced economic perceptions, although it remains challenged by persistent financial pressures.
