Consumer confidence rises again in June as economic outlook improves
Consumer confidence picked up again in June, a new survey shows, in a sign that the improving economic outlook is slowly feeding through into household budgets.
GfK’s overall consumer confidence measure increased by three points in June to hit -14, the third consecutive month of improvement.
Respondents were much more confident in the prospects for the economy over the coming year, with confidence in the general economic situation rising by six points to -11.
The major purchase index, which measures consumers’ likeliness to make a big discretionary purchase, also rose two points to -23.
These positive changes more than offset a deteriorating outlook on the personal side. The index measuring consumers’ personal financial situation fell by three points in June.
“Once again we have an improved reading for the Overall Index Score with June showing a three-point improvement bolstered by consumers’ more sympathetic view of the economy for the last year and the 12 months to come,” Joe Staton, Client Strategy Director GfK, said.
“Consumer confidence continues its robust long-term upward trend this month, and has recovered significantly since the record low of -49 reached in September 2022. Consumers like financial certainty, and this has to be the cornerstone if we are to see confidence break out into positive territory,” he added.
After falling into a shallow recession in the second half of last year, the economy has rebounded faster than many economists expected on the back of falling inflation and the prospect of lower interest rates.
Figures out earlier this week showed that inflation fell to two per cent in May, hitting the all-important target for the first time since July 2021.
Although the Bank of England left interest rates on hold yesterday, the minutes showed that the decision was “finely balanced” raising the chances of an August rate cut.