British consumer sentiment rises to two-and-a-half year high

uk consumer

The GfK consumer confidence survey rose to -14 in June from May’s -17, touching its highest since November 2021

British consumer sentiment rose to a two-and-a-half year high this month, as households’ improved assessment of the wider 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, touching its highest since November 2021.

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

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

While June’s reading of -14 is the third successive month 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, according to GfK Client Strategy Director Joe Staton.

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

But households’ assessment of their own financial prospects was 3 points lower 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 growing demands on public services.

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