UK consumer mood hits one-year high, but financial gloom persists

LONDON: British consumer confidence rose this month to its highest level in a year, helped by improving sentiment around the economy and despite persistent gloom over personal finances, a survey showed on Friday (March 23).

Market research firm GfK’s consumer confidence index rose to -36 in March, in line with the consensus in a Reuters poll of economists and up from -38 in February and its highest since March 2022.

While still at levels historically associated with recessions, the improvement chimed with other gauges of Britain’s economy that suggest it could sidestep a long-lasting downturn that had been widely predicted last year.

Still, the GfK survey showed no improvement in its gauges of personal finances, which are linked most strongly to household expenditure.

“A small improvement in the overall index score this month masks continuing concerns among consumers about their personal financial situation,” said Joe Staton, client strategy director at GfK.

“Wages are not keeping up with rising prices and the cost-of-living crisis remains a stark reality for most,” he added.

Consumer price inflation rose unexpectedly to 10.4% last month, with food and drink costs rising at the fastest rate since 1977, according to official data earlier this week.

The Bank of England raised interest rates on Thursday by another quarter of a percentage point, adding to the strain on budgets for many households.

“Just having enough money to live right and pay the bills remains the number one concern for consumers across the UK,” Staton said. – Reuters