Consumer confidence increased two points month-on-month in May to -29 as people feel more positive about future prospects, according to GfK’s Consumer Confidence Index
Despite revised GDP figures revealing the UK is in a deeper recession than originally thought, two out of five consumer confidence measures increased while two also decreased.
However, consumer confidence is still worse than a year ago, when the index was -21.
Consumers believe their financial situation will improve over the next 12 months. The measure increased four points to -9, although this is six points lower than last year.
Consumers were also more positive about the general economic situation across the next 12 months, increasing seven points month-on-month to -26, but this is still 11 points lower than last year.
Last month revised GDP figures showed the UK economy shrank by 0.3% in the first quarter of the year rather than the initial 0.2% contraction.
GfK managing director of social research Nick Moon said: “After the revised ONS figures showed the economy is deeper in recession than previously thought, the Government will view these figures as good news. However, while this rise is indeed positive, consumer confidence remains mired in the very negative position it has been in for almost 18 months.
“The driver for this month’s surprise rise in consumer sentiment is borne entirely out of how people view the future rather than how they feel looking back at the last year. Even though optimism about how the economy will perform over the next 12 months has risen by seven points in the last month, it is still significantly down on where it was this time last year.”
Consumer confidence on the general economic situation over the last 12 months decreased one point to -58 – 14 points lower than in May last year.
Consumers lost confidence in the climate for major purchases as the measure decreased by two points to -32, month-on-month.
The ‘now is a good time to save’ Index increased two points to -16 – 15 points lower than in May last year.