The GfK consumer confidence index increased by seven points to -38 in February in a surprise rebound after languishing at historic lows. 

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Consumer confidence increased by seven points in February 

The index fell to its lowest at -49 in September last year, followed by a steady increase and then a decline to reach -45 in January 2023.

The index measuring changes in personal finances over the past 12 months increased by five points in February. However, this is still 15 points lower than the same time last year.

GfK predicts a nine-point increase in consumer confidence about personal financial situations to -18 over the next 12 months but says it will continue to be four points lower than in February 2022. 

 

Consumer confidence in the general economic situation improved by six points to -65 over the past year but this continues to be 15 points lower than the same time last year. It is forecast to increase by 11 points over the next 12 months to reach the same level as February 2022 at -43.

The major purchase index was at -37 – a three-point increase from January but 22 points lower than last year.

GfK also said the savings index increased by five points this month to 19 – five points higher than the same period last year. 

Joe Staton, client strategy director at GfK, said: “Despite widely reported headwinds of inflation continuing to outstrip wage rises and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year. 

“While it’s too early to talk about green shoots of recovery, the uptick across all measures should be welcomed. 

“But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over? 

“The headline consumer confidence score is still severely depressed and the mood, as well as the economy, remains a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.

“However, many challenges remain and this may be nothing more than a bubble of hope – and bubbles always burst.”

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