UK consumer confidence grows for third month in a row
The housing market is among those that (based on anecdotal evidence) have stalled while the nation waits to elect its new leader and governing party. That said, consumer confidence is up in the UK for the third month in a row, according to GfK’s long-running Consumer Confidence Index.
The Overall Index Score increased to three points in -14 in June (yes we’re still in minus numbers). The lowest score recorded was -49 in September 2022, with other historic lows in July 2008 (-38) for the global financial crisis and -35 in March 1990 in the lead up to the 1990/91 recession.
With the sun blazing while CIN writes this story – and all that means for the bike trade, plus potential buoyancy ahead for the economy once the General Election is settled, it would be tempting to see the start of H2 with rather more optimistic eyes than we began H1. Financial certainty is what’s really needed to turn things positive, says GfK.
“Once again we have an improved reading for the Overall Index Score with June showing a three-point improvement bolstered by consumers’ more sympathetic view of the economy for the last year and the 12 months to come,” Joe Staton, Client Strategy Director GfK, said. “Those measures on the economy registered sharp increases of seven points and six points respectively, and there was a welcome three-point boost in intentions to make major purchases. While June’s reading of -14 is the third month in a row that confidence has increased, the headline score remains negative owing to the difficulties so many have experienced as the unrelenting cost-of-living crisis batters household budgets.
“Nevertheless, consumer confidence continues its robust long-term upward trend this month, and has recovered significantly since the record low of -49 reached in September 2022. Consumers like financial certainty, and this has to be the cornerstone if we are to see confidence break out into positive territory.”
Elections, the economy and warmer weather
Westminster has paused normal business in favour of electioneering (although the movers and shakers in the cycle industry are continuing to meet and devise strategies). Can we really expect an uplift in the economy post 4th July? There is some reason to be positive. Speaking to The Times, AJ Bell said that, on average, the FTSE All-Share has recorded double-digit percentage gains in the first year after an election, where one PM was ousted in favour of another (although the polls may still be wrong on Rishi Sunak’s fate).
As part of its Overall Index Score, GfK also measures the general economic situation of the country during the last 12 months. It’s up seven points at -32, 22 points higher than in June 2023.
The ONS Retail Sales Index figures also provide some modest signs for positivity. Sales were up 2.1% by value and 1.2% by volume. The British Retail Consortium noted that larger retailers had performed well, with clothing and footwear among those benefitting from the change in temperatures (crocs and string vests, no doubt). Kris Hamer, Director of Insight at the BRC noted:
“Sales volumes still remain below their 2021 levels… With the election less than two weeks away, retailers look forward to working with the next government to understand how they can support an industry that unlocks over £460bn in consumer spending a year. Including the retail supply chain, the industry supports jobs for almost 20% of the workforce, meaning that improving consumer confidence and unlocking consumer spending is vital for jobs and investment right across the UK.”
Image by dae jeung kim from Pixabay
