Rise in consumer confidence masks ‘stark reality’ of cost-of-living crisis
Consumer confidence climbed slightly in March despite the cost-of-living crisis remaining a “stark reality” for most, according to a new survey.
The survey comes as UK inflation shot up unexpectedly to 10.4% in February from 10.1% in January – defying expectations of a fall to 9.9%.
GfK’s long-running Consumer Confidence Index increased two points in March, masking ongoing concerns about personal finances and rising to an overall score of minus 36. However, GfK found expectations for the general economic situation over the next 12 months have increased by three points, albeit to minus 40 – but nine points better than last March.
The major purchase index, an indication of confidence in buying big ticket items, also rose by four points to minus 33, nine points lower than a year ago.
Joe Staton, GfK Client Strategy Director, said: “Forecasts that headline inflation will fall this year have proved premature, given Wednesday’s announcement of an unexpected increase. Wages are not keeping up with rising prices and the cost-of-living crisis remains a stark reality for most.
“The recent Budget will bring relief to some sections of the population, but for now many people are simply looking to survive day-by-day. Just having enough money to live right and pay the bills remains the number one concern for consumers across the UK.”
With the UK narrowly avoiding recession in 2022 and financial pressures continuing to mount, almost three quarters (73%) of UK consumers are planning to cut back on retail spending over 2023, with fashion set to be the retail category hardest hit.