United Kingdom: Consumers perk up slightly in May
May 31, 2018
The GfK NOP consumer confidence indicator rose from minus 9 points in April to minus 7 points in May. However, the index remains firmly entrenched in negative territory, where it has been since April 2016, highlighting that consumers are still broadly pessimistic.
May’s uptick reflected consumers’ improved views of their personal financial situation over the previous 12 months and for the year ahead. In addition, consumers grew less pessimistic concerning the general economic situation over the last 12 months and for the year ahead. However, consumers became less willing to make major purchases in May.
Despite the improvement in the headline figure, Joe Staton, Client Strategy Director at GfK, commented: “there’s little motivation to spend - as seen by a two-point drop in the Major Purchase Index. With UK retail sales falling at their sharpest rate since the mid-90s, tough trading conditions for Britain's hard-pressed retail sector continue to take their toll. Shoppers are still not showing signs of a willingness to splash-the-cash.”
UK Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.1% in 2018 and 1.3% in 2019.
Author: Oliver Reynolds, Economist