MNI INTERVIEW: Upbeat UK Confidence Read Grounds For Optimism-GfK

A strong set of UK consumer confidence data provides grounds for optimism, with many households now less downbeat than in recent months, the head of a leading survey told MNI.

"While the Overall Index Score remains negative, all of the underlying five measures this April are significantly better than they were last April," Joe Staton, Strategy Director at GfK, said in an interview.

The Overall Index Score increased two points to -19 in April. Four measures were up and one stayed the same from last month’s announcement. The forecast for personal finances -- Staton's preferred measure of confidence levels -- over the next 12 months was unchanged at +2, 15 points higher than a year ago.

The continued pick-up in readings across the board "reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts," Staton said. (See MNI INTERVIEW: UK Pay Deals Slow To Around 5% In H1-Brightmine)

NOT THERE YET

However, he was quick to stress that the headline index remained well below levels seen in the early 2010s, noting sentiment was still "a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine".

Risks persist and conditions remain tough for consumers.

"There is still an awful lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges. Revised views on when the Bank of England might cut borrowing costs are also becoming a minor drag," Staton added.

With some inflation measures still sticky, many analysts now anticipate the first BOE rate cut will come in August and that easing could continue at a slower pace than previously expected. (See MNI POLICY: BOE Split Over Measures Of Inflation Persistence)

Though not yet ready to call the "green shoots of recovery", Staton agreed that "spring has arrived" and that, maybe, consumer confidence is "slowly becoming brighter and heading in the right direction.”