Consumer confidence improves

Consumer confidence improved by two points in April, according to GfK’s latest consumer confidence reading.

Confidence stood at -19 during the month, an improvement from -21 points recorded in both March and February. The improvement came in a month that saw inflation fall to its lowest since 2021, national insurance payroll taxes cut, and domestic energy prices drop to their lowest in two years. There were also signs the economy is recovering from last year’s shallow recession.

GfK cautioned, however, that overall confidence has a long way to go to return to the positive readings last recorded before the Brexit referendum in 2016.

Joe Staton, Client Strategy Director GfK, said “Headline confidence edged forward in April to -19. There was a welcome repeat of the March +2 score for how consumers feel about their personal finances in the next 12 months.

“While the Overall Index Score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts. However, we are a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine. There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges, and revised views on when the Bank of England might cut borrowing costs. But Spring has arrived and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction.”