UK consumer confidence 'improves' but stays near historic lows

By

Sandra Halliday

Published
Jul 3, 2020

UK consumer confidence has improved again although it remains fragile as there are few signs of economic stability. 

GfK released its latest Covid-19 flash report on Friday based on data gathered between June 18 and June 26, which includes the week in which stores in England started to reopen.

Its long-running Consumer Confidence Index has increased by three points over the past two weeks. Four measures increased and one measure decreased. But a quick look at the chart below for the past year shows that confidence levels remain well below even the weak points they reached last autumn.

Joe Staton, GfK‘s Client Strategy Director, said that “despite the backdrop of dire warnings about the state of the economy, large-scale job losses, the end of furlough with the prospect of further unemployment, and a possible second-wave of Covid-19, consumers appear to be slightly more confident as lockdown loosens across parts of the UK. 

“After the recent near-historic low of -36 for the Consumer Confidence Barometer last month, we‘re seeing some early signs of improvement across most measures, even though all our core scores remain negative. The seven-point jump in the Major Purchase Index could bode well for ‘reopening day’ this Saturday as more shoppers hit the high streets after a trip to the pub and visit to the hairdresser. However, economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.”

Overall, the total index score was -27, which may be higher than a few weeks earlier but is down from -13 a year ago. It's a similar picture for the ‘personal financial situation over the last 12 months’ measure, which has risen four points, but at -5 remains low in general and is down from the -1 of a year earlier. The same measure looking at the 12 months ahead is up only one point at -3 and again, is lower than it was a year ago.

UK consumers are also particularly gloomy about the overall economic situation in the country with their view of the last 12 months being at -60 and their expectations for the 12 months ahead being at -42. Both of these numbers are higher than a few weeks ago but are significantly lower than this time last year.

As Staton mentioned, intentions to make major purchases have improved, although the picture here is following a similar pattern to the other metrics. The index is up seven points compared to a few weeks ago, but is still only -25, much worse than the -2 of a year back.