UK consumer mood hits 1-year high, but financial pessimism lingers

March 24 (Reuters) – British consumer confidence rose this month to its highest level in a year, helped by improving confidence in the economy and despite lingering pessimism about personal finances, a survey showed on Friday .

Market research firm GfK’s consumer confidence index rose to minus 36 in March, in line with the consensus in a Reuters survey of economists, and from minus 38 in February and its highest level since March 2022.

While still at levels historically associated with recessions, the improvement coincided with other indicators of the British economy that suggest it could fend off a protracted downturn that had been widely predicted last year.

Still, the GfK survey showed no improvement in its personal finance indicators, which are more strongly linked to household spending.

“A small improvement in the overall index score this month belies continuing concerns among consumers about their personal financial situation,” said Joe Staton, director of client strategy at GfK.

“Wages are not keeping up with rising prices and the cost of living crisis remains a harsh reality for most,” he added.

Consumer price inflation unexpectedly rose to 10.4% last month, and food and drink costs rose at the fastest rate since 1977, according to official data earlier this week.

The Bank of England raised interest rates on Thursday by another quarter of a percentage point, adding to the pressure on many household budgets.

“Having enough money to live well and pay the bills remains the number one concern for consumers across the UK,” Staton said.

Reporting by Andy Bruce; Edited by David Milliken

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