NEWS23 June 2023

Consumer confidence rises despite UK inflation woes

Cost of Living News Public Sector Trends UK

UK – Consumer confidence has improved by a further three points in June despite continued inflation issues in the UK, according to the latest GfK Consumer Confidence Index.

Trolley with economic chart

The improvement in consumer confidence was led by a significant upturn in confidence in personal finances, with a seven-point rise for expected personal financial situation over the next year to a score of -1.

People’s perception of their personal financial situation over the previous year also increased, up five points to -15, with both scores being better than June 2022.

The figures come as inflation in the UK stayed at 8.7% this month for the second month in a row, prompting a 0.5% rise in interest rates to 5%.

Consumers’ confidence in the general economy also rose in June 2023, up five points for the year ahead to -25.

However, there was no movement in the score for the general economic situation for the previous year, which remained in deeply negative territory at -54.

The major purchase index, which measures whether now is a good time to make a significant purchase, also fell one point to -25, although the savings index rose six points to a positive score of 25.

The figures are based on a nationally representative survey of 2,000 UK adults carried out between 1st June and 14th June 2023.

Joe Staton, client strategy director at GfK, said: “Despite the fierce economic headwinds of the cost-of-living crisis, double-digit grocery price increases and the mortgage squeeze severely impacting both homeowners and renters alike, the UK Consumer Confidence Index has improved by another three points in June, the fifth monthly improvement in a row.

“The most telling finding is how we see our personal financial situation in the coming year – the money going in and out of our bank accounts – which shows a healthy seven-point increase.

“This is a whisker away from pushing into positive territory, something we have not seen since December 2021, and it’s also the third consecutive monthly increase – all of which is good news for the future.”