UK consumer confidence highest since Feb 2022 as ‘green shoots’ emerge: GfK

8:31 pm Thursday, April 20th, 2023

By Suban Abdulla

LONDON (Reuters) – British consumers were their most upbeat in more than a year this month, despite the surging cost of living, as they took a more positive view of their finances and the health of the wider economy, market research firm GfK said on Friday.

GfK’s Consumer Confidence Index rose for the third month in a row to -30 in April, up six points from March and the highest reading since February last year, just before Russia invaded Ukraine and spurred a surge in energy costs in most of Europe.

April’s reading was also above the -35 reading forecast in a Reuters poll of economists.

Consumers’ expectations for Britain’s economy in the next 12 months hit a 15-month high and they saw the prospects for their personal finances as the brightest since February 2022.

While the country’s economy is expected to avoid a recession this year, the broader picture remains weak with double-digit inflation proving harder to tame.

However, Joe Staton, GfK’s client strategy director, said there had been a “sudden flowering of optimism” among households.

“The brighter views on what the general economy has in store for us … could even be seen as the proverbial ‘green shoots of recovery’,” Staton said.

Official data earlier this week showed consumer price inflation fell less than forecast in March to 10.1%, and the cost of food and drinks surged by the most since August 1977.

Britain’s high inflation rate has caused investors to raise bets that the Bank of England will hike interest rates for the 12th time in a row at its next meeting in May, to help return double-digit inflation to its 2% target.

There was also an increase in GfK’s sub-index of shoppers’ willingness to make expensive purchases. GfK’s gauge of savings intentions fell marginally but was still positive and nine points higher than the same month last year.

The survey of 2,000 people was conducted between April 3 and April 13.

(Reporting by Suban Abdulla; editing by David Milliken)