Consumer confidence edges up as more businesses prepare to reopen

Fragile consumer confidence is showing some signs of improving as more businesses prepare to open their doors again this weekend, including pubs and hairdressers.

While the overall mood remains downbeat, it is less negative than a couple of weeks earlier, according to GfK’s (Growth from Knowledge) COVID-19 “flash report”.

The index measures people’s attitudes towards their households’ personal finances, the wider economy and how consumers feel about splashing out on major purchases.

The latest data, gathered between 18 and 26 June, produced an overall score of minus 27.

While this was still a negative score, it marked an improvement compared with a score of minus 30 in a previous survey carried out from 1 to 11 June.

Within the index, people’s attitudes towards making major purchases improved by seven points, when asked: “In view of the general economic situation, do you think now is the right time for people to make major purchases such as furniture or electrical goods?”

The major purchase index score was minus 25, an improvement compared with a score of minus 32 on this measure a couple of weeks earlier.

Lockdown measures will change in England from Saturday 4 July, as more businesses, such as pubs, restaurants, museums, cinemas and hairdressers, start to reopen. Nightclubs and indoor gyms remain closed for now.

Joe Staton, GfK’s client strategy director, said: “Despite the backdrop of dire warnings about the state of the economy, large-scale job losses, the end of furlough with the prospect of further unemployment, and a possible second wave of Covid-19, consumers appear to be slightly more confident as lockdown loosens across parts of the UK.

“After the recent near-historic low of minus 36 for the consumer confidence barometer last month, we’re seeing some early signs of improvement across most measures for our fourth COVID-19 flash, even though all our core scores remain negative.

“The seven-point jump in the major purchase index could bode well for ‘reopening day’ this Saturday as more shoppers hit the high streets after a trip to the pub and visit to the hairdresser.

“However, economic headwinds could easily blow any recovery off-course with confidence remaining fragile and volatile amid few signs of stability.”