Britons were more positive about the future economic situation in April than they were in March, but are putting off major purchases amid financial and political uncertainty, a new study has today shown.
Meanwhile, fewer people in the UK were positive about their personal financial situations in April than March and saving rates fell, according to market research institute GfK’s latest survey.
GfK’s overall consumer confidence index remained at minus 13 in April, the same as March and February, only one point above its lowest score in six years.
However, the failure of the score to deteriorate and an increase in the number of Britons saying they feel positive about the economic situation over the next 12 months are the latest signs that the current Brexit impasse is not greatly affecting consumers.
Earlier this month the Confederation of British Industry (CBI) said retailers had reported their first rise in sales for five months, in a sign that shoppers were spending again.
Joe Staton, client strategy director at GfK, said: “It appears it’s a case of ‘keep calm’ when it comes to how confident consumers are feeling right now.”
“Despite political carry-on in the Westminster bubble with the clock ticking on Britain’s eventual departure from the EU, consumers are holding firm and remain unshaken by the daily headlines of turmoil and intrigue,” he said.
Chief UK economist at Capital Economics, Ruth Gregory, said: “Most of it probably reflects the recent robust rises that we've seen in employment and wages that have put more money in people's pockets.”
“The fundamentals that are underpinning household spending are still pretty strong,” she said.
But, she added, the low rate of unemployment and roughly on-target inflation “suggest that consumer confidence would be higher if it wasn't for Brexit”.
Bank of England governor Mark Carney will have taken note of better-than-expected consumer confidence in the run up to Thursday’s interest rates decision, but it is unlikely that Threadneedle Street will raise rates as Brexit uncertainty continues.