Friday 31 May 2019 12:01 am

UK consumer confidence holds up in May despite Brexit impasse

Consumers were feeling more upbeat about the British economy in May than they were in April despite Brexit, a new survey has shown, although confidence was well below the longer-term average.

Read more: Warm-weather pub trips boost tepid consumer spending growth in April

Meanwhile, more people felt positive about their personal financial situation than during the month before, the latest consumer confidence report from market research institute GfK has revealed.

The news comes as further evidence that consumer confidence has held up remarkably well during a time of political uncertainty. Earlier this month the Bank of England painted a picture of an economy propped up by household spending as business investment and trade have suffered.

GfK’s overall consumer confidence index increased to minus 10 in May after registering a score of minus 13 in April. Despite seeing an improvement, the score was well below the average score of the last five years of minus five.

The survey index which measures Britons’ views of their personal finances over the next 12 months rose to a score of five in May from zero in April.

Joe Staton, client strategy director at GfK, said “measures about how consumers view their personal financial situation” are “a key metric impacting day-to-day spending”, suggesting that consumer spending may hold up over the coming months.

He said: “With the Government forecasting an economy showing modest growth, where inflation is under control, unemployment is at multi-decade lows and the employment rate is at a record level, perhaps this sunnier picture is to be expected.”

Some economists have warned that weak business investment and ongoing political uncertainty mean current record highs in employment may soon fall back, bringing down consumption growth.

Read more: Bank of England: We'll hike interest rates after orderly Brexit

Deputy Bank of England governor Dave Ramsden said in a speech in Scotland today: “The weakness of investment also casts further doubt on how durable the resilience of the labour market has been.”