Tiny rise in February consumer confidence fails to mask challenges ahead - GfK
UK consumer confidence is showing signs of recovery… albeit slowly. But any positive reading in February’s main Consumer Confidence Index isn’t anywhere near enough to reflect a “spring back to life”, GfK said Friday.
Although four index measures increased in comparison to the January, and one remained flat, the UK is still “facing challenges”, the report showed.
The headline consumer confidence reading in GfK’s long-running Index increased five points over January, although it still stands at a reading of -23.
Elsewhere, the index measuring changes in Personal Finances over the last 12 months remained flat at -8, seven points lower than February 2020. But the forecast for Personal Finances over the next 12 months at least rose two points this month to +4, still two points lower than February 2020.
The measurement for for the country’s General Economic Situation during the last 12 months is also up three points at -64, but still stands 41 points lower than in February 2020. Expectations for the General Economic Situation over the coming 12 months jumped 14 points, but remain nine points lower than 12 months ago.
Meanwhile, the Major Purchase Index increased five points to -19 in February, still 25 points lower than it was in February 2020.
As for the Savings Index, this inched up just one point to +19 in February, but remains one point lower than this time last year.
Joe Staton, GfK’s Client Strategy Director, said: “With the headline confidence score up by five points this month, driven by an energetic 14-point jump in how we view the economy for the coming year, it would be tempting to talk of a return to 'normality'. But would it be more realistic to talk of ‘challenges’”?
He added: “We need to be cautious because the positive tailwinds of the vaccination roll-out are being met by the very strong headwinds of unemployment, the threat of inflation and the difficulty that many face in affording day-to-day living costs – all serious issues that can dampen consumer confidence”.
Staton also noted: “Perhaps the key lies in the healthier score for how we see our personal finances going forward as this will impact our spending plans that in turn will fuel the post-pandem".
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