UK Consumer Confidence Gains Ground in April, Despite Economic Challenges

After months of decline, consumer confidence in the UK has shown signs of improvement in April 2024. According to the latest survey conducted by GfK, the overall index score rose by two points to -19, indicating a slight increase in consumer optimism.

Key Findings

• Consumer confidence rose two points to -19 in April.
• Four key measures saw improvement, while one remained stable.
• Confidence in personal finances for the coming year remained unchanged.

Survey Methodology

The GfK survey, conducted from April 2 to April 15, collected responses from a sample of 2,009 individuals. The survey measures consumer confidence across five key areas: personal finances, general economic situation, major purchases, savings, and future expectations.

Measures of Confidence

### Personal Finances

The index measuring changes in personal finances during the last year improved by two points to -11, indicating that consumers are feeling slightly more positive about their current financial situation. However, the forecast for personal finances over the next 12 months remained unchanged at 2, suggesting that consumers remain cautious about the future.

### General Economic Situation

The index measuring the general economic situation during the last 12 months rose by four points to -41, indicating that consumers are slightly less pessimistic about the economy. Additionally, expectations for the general economic situation over the next year improved by two points to -21, suggesting that consumers are cautiously optimistic about the future.

### Major Purchases and Savings

The major purchase index, which measures consumer confidence in making large purchases, rose by two points to -25, indicating a slight improvement in consumer willingness to spend on non-essential items. The savings index, which measures consumer confidence in saving money, also improved by one point to 26, suggesting that consumers are still prioritizing saving over spending.

Stay tuned for the next part of this comprehensive report, where we will delve deeper into expert commentary and explore the implications of these findings on consumer behavior and the UK economy.

Consumer Confidence on the Rise: UK Households Find Hope Amidst Economic Challenges

Key Findings

With the release of the latest consumer confidence index, the UK population has received some positive news amidst ongoing economic uncertainties.

In April 2024, consumer confidence rose two points to -19, marking an improvement from the previous year. This increase is primarily driven by rising optimism in personal finances, the general economic situation, and the ability to make major purchases.

Survey Methodology

The survey was conducted by GfK, a reputable market research firm, from April 2 to April 15, 2024. A sample size of 2,009 individuals participated, providing a comprehensive representation of the UK population.

Measures of Confidence

Personal Finances

The index measuring changes in personal finances during the last year saw a two-point increase to -11, indicating improved financial well-being among UK households. However, the forecast for personal finances over the next 12 months remained unchanged at 2, suggesting cautious optimism.

General Economic Situation

Confidence in the general economic situation also improved, with the index measuring the last 12 months rising four points to -41 and expectations for the next year increasing by two points to -21. These improvements reflect growing confidence in the UK economy despite ongoing challenges.

Major Purchases and Savings

The major purchase index rose by two points to -25, indicating a greater willingness among consumers to make large purchases. The savings index also increased by one point to 26, suggesting that households are putting aside more money for future needs.

Expert Commentary

Joe Staton, GfK

“While the overall index score remains negative, it’s encouraging to see improvements across all underlying measures compared to April 2023. These improvements reflect lower inflation and the anticipation of tax cuts. However, caution is still warranted due to ongoing economic challenges and revised expectations for interest rate cuts,” said Joe Staton, Client Strategy Director at GfK.

Linda Ellett, KPMG

“The rise in confidence levels is a welcome sign, but it’s important to remember that households are still feeling squeezed,” said Linda Ellett, Head of Consumer Markets at KPMG. “Only 3% of consumers surveyed reported increased discretionary spending, while half have cut spending due to increased essential costs. Savings are being used to cover essentials or pay down mortgages, limiting spending on major purchases.”

Conclusion

The April 2024 consumer confidence index provides a glimmer of hope for UK households amidst economic uncertainties. While challenges remain, the improvements in key measures indicate a growing sense of optimism and resilience among the population. As the economy continues to evolve, it will be crucial to monitor consumer sentiment closely to assess its impact on spending and investment decisions.