Consumer confidence rebounds from historic lows - GfK

UK consumer confidence rebounded from historic lows in February, according to a survey released by GfK on Friday.

The long-running consumer confidence index rose seven points to -38, with all five confidence measures up. This was the highest level since April 2022 and ahead of analysts’ expectations for a reading of -43.

The index measuring changes in personal finances during the last 12 months was five points higher at -26, while the index for personal finances over the next year was up nine points at -18.

The measure for the general economic situation of the country in the last year was six points higher at -65, while the same index but for the next 12 months rose 11 points to -43.

The major purchase index ticked up three points to -37 and the savings index - which measures how likely people are to save - increased five points to +19. This index is not included in the overall GfK measure.

Joe Staton, client strategy director at GfK, said: "Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year.

"While it's too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over? The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.

"However, many challenges remain and this may be nothing more than a bubble of hope - and bubbles always burst."