Things seem pretty downbeat in terms of the UK economy – but, curiously, most Brits are actually in pretty good spirits about what’s next right now.
That’s according to new findings, released on Friday, from market research firm GfK.
After surveying 2,000 people between June 1 and June 14, GfK found that households are feeling more optimistic about their own finances and the economy’s future compared to last month.
Consumer confidence index increased for the fifth month in a row, taking it to -24 on GfK’s scale overall.
For context, it was -27 in May, and a dismal -49 last September following the rollout of Liz Truss’s disastrous mini-budget. The value of the pound plummeted and the markets went into chaos at the time.
And, -24 is even better than a Reuters polls of economics expected.
This index score is a summary of five different markers meant to assess how confident consumers feel right now.
One of these measures how households feel about their personal financial situations over the next 12 months, and it seems people are feeling so much better than they were even a month ago. This score is now at -1.
OK, that sounds bad, but it is actually good.
In May, the score for this was at -8; in April, it was at -13; and in June last year, it was at -28.
The market research suggested people still feel pretty poorly about the “general economic situation over the last 12 months”, scoring -54 in both June and May.
But, consumers are feeling better about the country’s future in the 12 months ahead, now -25 instead of -30.
The survey found shoppers’ willingness to buy expensive things did fall by one point though, to -25, while intentions to save increased – both outcomes to be expected when inflation and interest rates are high.
Still, it’s worth pointing out that this survey was conducted before the Office for National Statistics (ONS) revealed that inflation for May stayed at the same rate as in April (8.7%), despite expectations that it would fall below that.
It means the UK has a notably worse inflation rate compared to other major economies in the EU and the US.
It was also revealed this week that national debt is at 100% of GDP, and that the Bank of England has increased interest rates to a whopping 5% (an increase of half a percentage point) in an effort to bring down inflation.
Still, GfK’s client strategy director Joe Staton said that consumers were showing “remarkable resilience”, even though the cost of living crisis continues.
This is the fifth month in a row there’s been an improvement in consumers’ attitudes too, even though mortgages are squeezing both homeowners and renters.
Staton said: “If consumers continue to weather the current economic storm, then this will provide a firm foundation for getting back to growth.”
After all, the UK has narrowly dodged a recession (the technical definition at least), having just sidestepped two consecutive quarters of negative growth.
Station continued: “The most telling finding is how we see our personal financial situation in the coming year – the money going in and out of our bank accounts – which shows a healthy seven-point increase. This is a whisker away from pushing into positive territory, something we have not seen since December 2021.”
So – perhaps better times really are around the corner?