MNI INTERVIEW: UK Consumer Struggling Despite Bright Spots-Gfk
Confidence ticks up amongst UK consumers but overall remains depressed in "tough economic conditions".
embargoed 0001 Friday Sept 22
UK consumer sentiment continued to improve in September, though it remained at depressed levels despite slowing inflation and higher wages, the head of a leading survey told MNI.
“With falling inflation figures, growth in wages and high interest rates, UK consumer confidence rose this month to -21, the best recorded showing since January 2022," Joe Staton, Client Strategy Director at GfK said.
Alongside the pick-up in the overall Consumer Confidence Index, the index measuring changes in personal finances during the last year rose two points to -13, while the outlook over the next 12 months -- a favoured indicator for Staton -- increased one point to -2, or 38 points higher than a year ago.
While inflation data released after the current survey period showing a further decline in August and the Bank of England keeping rates steady at 5.25% this week, the sentiment uptick could continue into next month Staton said.
"The outlook for personal financial situation indexes for both the past year and next are registering marginal but welcome growth, while expectations for the UK’s wider economy in the coming year show a more robust six-point increase," Staton said.
"I'd expect a few more points to be added next month if the current trend of consumer friendly headlines continue," he added.
However Staton said overall levels remain depressed.
"This month’s improved headline score is good news, but many households are still struggling with the cost-of-living crisis and that overall economic conditions remain tough," he said "The wider reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative.”
One bright spot Staton pointed to that could signal a more optimistic outturn in coming months was an improvement in sentiment across London -- often a leading light for wider UK outlooks. (MNI INTERVIEW: Key UK Consumers See Sharp Confidence Dip)
"Confidence has been positive across London for two straight months now," Staton said, noting that it recovered from a confidence dip in July. Sentiment in the capital outpaced every other region in the UK in September, he said, adding that often "where London leads, others follow.”