The GfK Consumer confidence index rose to -5 in May, up from -7 in April.
This figure is relatively robust by historical standards, it compares to a long run average of -7, a post Brexit July 2016 reading of -12, and a minimum reading of -39 (July 2008).
While this month’s survey showed consumers’ assessment of the economic situation hasn’t changed, consumers are showing an increased appetite to shop and save.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown:
‘UK consumers continue to confound expectations with their optimism, though the inflationary squeeze on household incomes is only just starting to bite. If wage growth remains anaemic, we can expect consumers to feel the pinch in the coming year as weaker sterling and higher energy costs feed through into monthly budgets.
The one saving grace for UK consumers is mortgage interest rates are still at extremely low levels, highlighting the bind that the Bank of England finds itself in. Despite rising inflation it’s really in no position to raise interest rates anytime soon without damaging the engine of the British economy. Consequently we can still expect UK interest rates to remain low for some considerable time yet.’