UK consumer confidence sees unexpected increase

The overall index score is made up of five measures: personal financial situation over the last 12 months, which increased by one point to 2; personal financial situation over the next 12 months, which increased by two points to 4; general economic situation over the last 12 months, which increased by three points to -20; general economic situation over the next 12 months, which remained unchanged at -21; and major purchase index, which increased by two points to 9. 

The savings index, which is commented on but not used in the overall index score, rose by two points to 9.

Joe Staton, head of market dynamics at GfK, described the overall trend as "an unexpected uptick" as consumers report "increased confidence in their personal financial situation, the wider economy, and future plans for shopping and saving."

Staton added that, despite life becoming more expensive (with inflation hitting its highest level in four years and wages dropping in real time for the first time in three years, "stagnant" living standards had yet to significantly dent consumers’ spirits, as the jump in the major purchase index indicates that they're still willing to spend.  

"Although the Overall Index Score is bumping along in negative territory, we haven’t seen any significant fall of the kind we might expect during such periods of pre-election and pre-Brexit uncertainty," said Staton. "Perhaps the real squeeze in living standards is yet to hit home. After years of people paying off debts post-downturn, unsecured borrowing has steadily increased since 2014 reaching record highs this month.

"When will we get our comeuppance and realise we have to ‘pay-the-piper’?”