The GFK Consumer Confidence Index saw a rise in June, marking the third consecutive monthly increase.
- Consumer confidence increased by three points but remains negative at -14 due to the cost of living crisis.
- Three out of five index measures improved, one declined, and one remained unchanged compared to the previous month.
- Optimism about the UK economy contributed to the index’s rise despite financial challenges.
- The savings index experienced a decline, while predictions for personal financial situations and major purchases showed mixed results.
The GFK Consumer Confidence Index recorded a noticeable upward trend in June, marking the third consecutive monthly improvement. However, despite a three-point increase, the index remains in negative territory at -14. This ongoing negativity is primarily attributed to the persistent cost of living crisis, which continues to exert pressure on household budgets across the UK.
Out of the index’s five key components, three indicated improvement over the previous month, one displayed a decline, and one remained constant. The index assessing personal finances over the past year held steady at -10, yet it was five points higher compared to the same period last year. This demonstrates a relatively enhanced perception of personal economic stability despite current challenges.
Forecasts for personal finances in the upcoming year showed a three-point drop to +4, though still maintaining a five-point gain from June 2023. This mixed sentiment reflects cautious optimism about future financial conditions amid ongoing economic uncertainty. Additionally, the general economic outlook for the country improved significantly, rising by seven points to -32, which is 22 points higher than the previous year, indicating a more positive view of the broader economic landscape.
Expectations for the national economic situation over the coming year also appeared more optimistic, with a projected six-point increase to -11, a 14-point rise from the same time last year. In parallel, the major purchase index climbed three points to -23, demonstrating a slight increase in consumer willingness to engage in significant spending compared to the previous year.
Conversely, the savings index saw a decrease of five points, settling at +22, marking a three-point drop from the previous year. This indicates a reduction in savings confidence amidst broader economic concerns. GFK’s client strategy director, Joe Staton, emphasised the importance of financial certainty as a foundation for transitioning consumer confidence into positive territory. He highlighted how confidence has gradually rebounded since the record low of -49 in September 2022, underscoring the role of financial stability in fostering further improvement.
In summary, while consumer confidence has been rising steadily, it remains negative, reflecting ongoing economic challenges.
