UK consumer confidence "surprisingly stable" but turbulence looms
today May 2, 2017
Despite growing inflation and subdued wage growth, UK consumer confidence has yet to show signs of the predicted post-Brexit trigger downturn, the latest GfK Consumer Confidence Index showed. Confidence is not exactly buoyant, but it isn't plunging either and consumers still seem to be prepared to spend.
UK consumer confidence remained in negative territory in April, dropping one point to -7, showing a “‘surprisingly stable” picture considering the high levels of concern, said GfK. Four of the five measures decreased, leaving only the Major Purchase index showing an improvement.
Joe Staton, head of market dynamics at GfK said the state of consumer confidence it still confusing. “Consumers continue to remain positive about the state of their personal finances and even report that now is a good time to buy. But is this too good to be true?" he asked. "Is this simply the calm before the storm? Is pre-Brexit economic turbulence yet to really batter households? That threat cannot be ruled out. But for the moment, consumer sentiment remains relatively buoyant as we enter our two-year window of renegotiation and navigate the run-up to the general election."
The index measuring changes in personal finances during the last 12 months decreased by one point the month to +1, two points lower than April 2016. Meanwhile, the forecast for personal finances over the next 12 months decreased one point to +2. This is five points lower than last year.
Consumers continue to be concerned about the economic outlook of the country, with the measure for the General Economic Situation during the last 12 months decreasing two points to -23. This is nine points lower than April 2016, and expectations for the next 12 months are seven points lower than last year, dropping one point in April to -21.
The Major Purchase Index remains relatively buoyant at +7; this is one point higher than last month and two points higher than this time last year.
The Savings Index entered positive territory in April, increasing two points to +1, but consumers are still cautious when it comes to spending: the reading was four points lower than April 2016.
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