UK consumer confidence stable, but questions arise over inflation threat
UK consumer confidence remained stable in June and there’s a brighter picture for personal finances. But the question remains whether the threat of inflation is already clouding prospects for the economy, Gfk said in its regular monthly report.
“Forecasts for rising retail price inflation could weaken consumer confidence quickly and that may account for the six-point dip in June in our measure for the wider economy in the coming year”, the market research institute’s client strategy director Joe Staton said.
But at least for now GfK’s long-running Consumer Confidence Index stayed at -9 in June after 16 months of a Covid-induced roller-coaster. Four measures were up compared to May and one measure was down.
The index measuring changes in personal finances over the last 12 months was up four points at 0, nine points better than June 2020. And the forecast for personal finances over the next 12 months was one point higher this month at +11. That’s points higher than this time last year.
The measure for the general economic situation of the country during the last 12 months was up one point at -47, some 12 points higher than last June. Expectations for the general economic situation over the coming 12 months have dropped by six points to -2, but were still 46 points higher than a year ago.
The Major Purchase Index increased by two points to -5 this month, some 27 points higher than it was this month last year, which will be encouraging for retailers.
Finally, the Savings Index slipped one point to +21 in June, five points higher than this time last year.
Staton added: “On a more positive note, we have strong numbers for our personal financial situation, both for the past year and the year to come. In addition, this month’s further improvement in the Major Purchase Index – the third month in a row – could see shoppers spending in anticipation of a staycation summer”.
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