UK shopper confidence at highest since April 2022

British shopper confidence rebounded in February to its highest stage in almost a yr, an indication of family resilience regardless of the price of dwelling disaster, knowledge confirmed on Friday.

Analysis group GfK mentioned its Client Confidence Index, a carefully watched measure of how individuals view their private funds and extra broadly financial outlookrose seven factors to -38.

Beating consensus forecasts of -43, that is the best studying since April 2022 for the index, which fell to a near-record low in January. The measure remained nicely beneath zero, nevertheless, indicating that almost all respondents reported a drop in confidence.

Joe Staton, director of buyer technique at GfK, mentioned that though the February rating was “nonetheless severely depressed”, customers had “abruptly proven extra optimism concerning the state of their private funds and the scenario normal economic system, particularly for the approaching yr”.

Respondents to the survey, based mostly on interviews carried out between February 1 and 13, had been extra optimistic concerning the yr forward, with the sub-index measuring their normal outlook on the long run financial scenario leaping 11 factors between January and February.

Line chart of consumer confidence index showing UK consumer confidence increased in February

Customers additionally reported regained confidence of their private funds, together with a rising willingness to make big-ticket purchases.

The financial savings index, which measures the chance of customers saving cash however is just not included within the total rating, rose from 14 to 19, a stage 5 factors greater than in February. Final yr.

The slight uptick in all 5 measures included within the total index suggests customers could expertise “a milder recession than consultants predicted,” Staton mentioned.

The survey follows a sequence of encouraging official knowledge, exhibiting the UK prevented a contraction within the remaining quarter of 2022, whereas the labor market remained resilient regardless of financial headwinds.

Headline inflation fell to 10.1% in Januarydown from its 41-year excessive of 11.1% in October, the Workplace for Nationwide Statistics mentioned final week.

On the identical time, public funds recorded a £30bn shock within the monetary yr ending in January, the ONS introduced on Tuesday, providing Chancellor Jeremy Hunt the choice of offering additional assist to households in his March 15 spring price range.

General shopper confidence in February was 12 factors decrease than in the identical month in 2022 as hovering vitality payments and rising rates of interest and meals costs weighed on family budgets in course of the final 12 months.

“[Consumer] the temper in addition to the economic system stay removed from pre-lockdown ranges,” Staton mentioned, “however a little bit of shopper resilience may be what we have to mitigate any downturn in 2023.”