Consumer confidence remains resilient

26th June 2023

New figures from GfK’s consumer confidence index have shown consumer confidence strengthened more than anticipated, reaching its strongest level in 17 months despite persistently high inflation and rising interest rates.

The research reported a rise of 3 points to minus 24 in June. Analysts had expected a reading of minus 26. The report indicates households are coping with the worst cost-of-living crisis in generations.

The figures mean that consumer confidence has increased for the fifth consecutive month.

Separately, retail sales volumes grew by 0.3 per cent in May, according to data from the Office for National Statistics. The rise is partly due to a boost from the warm weather, the King’s coronation and May bank holidays.

Joe Staton, Client Strategy Director, 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. Consumers are showing remarkable resilience in the face of inflation that is currently refusing to yield. This is the best showing for the Overall Index Score for the past 17 months and, if consumers continue to weather the current economic storm, then this will provide a firm foundation for getting back to growth.”