The improvement came in a month that saw inflation drop to its lowest since 2021, national insurance payroll taxes cut and domestic energy prices decline to their lowest in two years
UK consumer confidence edged higher this month as easing inflation and the prospect of further tax cuts made people more willing to spend, according to a survey.
GfK said its key gauge of household sentiment increased to minus 19, up two percentage points from March and well above the minus 30 logged in April last year when the cost-of-living crisis was still exerting a painful grip.
The improvement came in a month that saw inflation drop to its lowest since 2021, national insurance payroll taxes cut and domestic energy prices decline to their lowest in two years. There were also signs the economy is recovering from last year’s shallow recession.
That’s good news for Prime Minister Rishi Sunak, who is counting on rising living standards to deliver a “feel-good factor” ahead of an election widely expected in the autumn. With his Conservative Party trailing in opinion polls, Sunak has made no secret of his desire to reduce taxes again before the vote.
Spring has arrived and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction, according to Joe Staton, client director at GfK.
Four of the five measures that make up the index increased this month, with consumers declaring themselves less pessimistic about the economic outlook and more willing to splash out on big-ticket items.
An index tracking how Britons feel about their financial prospects stayed at plus 2, showing more expect things to get better than worse in the coming year.
GfK cautioned, nevertheless, that overall confidence has a long way to go to return to the positive readings last logged before the Brexit referendum in 2016.