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UK consumer confidence up despite falling sales

UK consumer confidence improved slightly during May, despite rising prices and political uncertainty. GfK’s Consumer Confidence Index increased to -10, with four of its five measures rising and one remaining the same.

However, the increased confidence came in the same month that the British Retail Consortium announced a 2.7 per cent drop in retail sales.

“Consumers have managed a seasonal spring in their step with a three-point uptick in consumer confidence this month,” says GfK client strategy director Joe Staton. “Although the Overall Index Score is still bumping along in negative territory, we’re seeing stronger positives in measures about how consumers view their personal financial situation – a key metric impacting day-to-day spending – coupled with a less negative view of the general financial situation across the UK in the coming year.

“With the Government forecasting an economy showing modest growth, where inflation is under control, unemployment is at multi-decade lows and the employment rate is at a record level, perhaps this sunnier picture is to be expected? But before we see a leap back into the brighter positive numbers last seen in January 2016, consumers will need to be convinced in heart, head and wallet that Brexit’s murkiness has finally come to an end. And there are potentially dark clouds on the horizon with the next EU deadline of October 31st.”
 

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