UK GfK consumer sentiment rises to highest since Nov 2021

By Thomson Reuters Jun 20, 2024 | 6:09 PM

LONDON (Reuters) – British consumer sentiment rose to a two-and-a-half year high this month, as households’ improved assessment of the broader economy outweighed greater concerns about their personal finances, a survey showed on Friday.

The GfK consumer confidence survey, the longest-running of its kind in Britain, rose to -14 in June from May’s -17, reaching its highest level since November 2021. The reading was above all forecasts in a Reuters poll of economists.

Consumer sentiment tumbled to a record low of -49 in September 2022, a month before soaring energy prices pushed inflation to a 41-year high of more than 11%.

Inflation returned to its 2% target last month, and morale has steadily recovered, but most households are still worse off tan before the inflation surge, weighing heavily on Prime Minister Rishi Sunak’s political chances in July 4’s election.

“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,” GfK Client Strategy Director Joe Staton said.

June’s survey showed a 7-point rise in households’ assessment of the general economic situation over the past 12 months, and a 6-point rise in the outlook.

But households’ assessment of their own financial prospects was down 3 points from May and their assessment of their financial situation over the year was unchanged.

Opinion polls show a narrow majority of the British public expect to have to pay more tax, regardless whether Labour or the Conservatives form the next government.

Most economists forecast Britain’s overall tax burden – already the highest since 1949 – is set to keep rising, aggravated by weak growth, high debt interest payments and increasing demands on public services.

(Reporting by David Milliken, editing by Andy Bruce)