Consumer confidence up in April with lower inflation and further tax cuts in sight

Consumer confidence increased two points to -19 in April, according to GfK’s long-running Consumer Confidence Index, reflecting the impact on household budgets of lower inflation and talk of further tax cuts.

Four measures were up in comparison to last month’s announcement, including 'personal finances', 'general economic situation', 'major purchase index' and 'savings index'.

Joe Staton, Client Strategy Director GfK, said: "Headline confidence edged forward in April 2024 to -19. There was a welcome repeat of the March +2 score for how consumers feel about their personal finances in the next 12 months.

"While the Overall Index Score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.

"However, we are a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine.

"There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges, and revised views on when the Bank of England might cut borrowing costs.

"But spring has arrived and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction."

The measure for the general economic situation of the country during the last 12 months is up four points at -41, which is 14 points higher in comparision to April last year.