Consumer confidence in the UK has experienced a notable decline in April amid growing concerns over rising inflation and a succession of increased bills that are affecting household finances. According to GfK’s Consumer Confidence Index, the measure, which tracks public sentiment towards the economy and personal financial situations, dropped by four points to a level of minus 23.
The most substantial fall was recorded in expectations for the wider economy over the coming year, which plummeted by eight points to minus 37. This represents a significant deterioration of 16 points compared to the same period last year. Confidence in personal finances also decreased, falling by four points to minus three, marking a decline of five points from April 2023.
The indicator for confidence in making major purchases, such as big-ticket items, also slipped by two points to minus 19. However, this figure remains six points higher than it was a year ago, suggesting some resilience in consumer willingness to spend on significant investments despite the overall downturn in confidence.
Neil Bellamy, consumer insights director at GfK, provided analysis on the reasons behind the dip in consumer sentiment. Speaking to The Irish News, Bellamy said: “Headline confidence is down four points in April, led by two sharp drops in our economic measures. There are good reasons for this downturn. Consumers have not only been grappling with multiple April cost increases in the form of utilities, council tax, stamp duty and road tax, but they are also hearing dire warnings of renewed high inflation on the back of the Trump Tariffs.”
He further commented on the potential impact of inflation trends: “The inflation rate eased in March, but are we now on the verge of another round of rapidly increasing prices? If so, consumer confidence is likely to collapse and the broad gains seen since the disastrous September 2022 mini budget, when confidence hit a record low of minus 49, could quickly be eroded.”
The report highlights the continued challenges faced by consumers managing household budgets amidst price increases across various essential costs, alongside uncertainty about future inflationary pressures. This situation has eroded economic optimism and is reflected in the declines observed in multiple facets of the Consumer Confidence Index in April.
Source: Noah Wire Services