Consumer confidence far from a picture of ‘robust health’ despite small rise

Consumer confidence has risen for the second month in a row, driven by increasing confidence in the UK’s general economic situation despite reservations remaining around personal finances, according to GfK’s Consumer Confidence Barometer.

The Overall Index Score, which brings together five different measures of consumer confidence, increased by one point to -19 in March.

This is positive insofar as it shows a rebound from the decline seen at the beginning of the year, but as GfK’s consumer insights director Neil Bellamy points out, it’s clear we are not looking at a picture of “robust health” when it comes to the UK economy.

The most prominent rise in consumer attitudes came with regards to the general economic situation over the last 12 months, which was up by two points to -42 and is three points higher than the -45 recorded at the same point last year.

This went hand in hand with an increase in sentiment towards the general economic situation over the next 12 months (up two points to -29), which has risen by five points in the past two months.

This was balanced out, however, by a fall in consumers’ perception of their personal financial situation, which showed signs of growth in February. Attitudes towards their personal financial situation over the last 12 months fell by two points to -9, an improvement on the -13 recorded in March 2024, while the perception of personal finances over the next 12 months fell by one point to 1.

Despite these falls it’s clear the view amongst consumers of the general health of the UK economy is having the largest impact on consumer confidence.

“Daily living is still an expensive experience and household budgets remain stretched. Any kind of economic setback or surprise could easily upset the apple cart,” explains Bellamy. “Nevertheless, many marketers will see an opportunity to create a little cheer by offering a fresh and strong value message, folding in humour, fun and enjoyment where appropriate.”

The Major Purchase Index was the only measure to stay at the same level (-17), an increase of 10 points from March 2024.

GfK also records a Savings Index, demonstrating consumers’ inclination to save. This is not included when calculating the Overall Index Score, but fell sharply by five points to +25 – the same level it was at 12 months ago.