In March, UK consumer confidence showed a slight improvement, marking the second consecutive month of growth following a period of decline. While this is a positive trend, it is important to note that the overall index remains in negative territory. This suggests that consumers still have ongoing concerns about their personal finances.

The GfK’s Consumer Confidence Index, which is considered a reliable measure of the nation’s financial pulse, revealed that three out of the five measures showed improvement compared to the previous month. However, the index measuring changes in personal finances remained unchanged over the past year, with a reading of -26. This is a significant 13 points worse than the same period last year.

Furthermore, the forecast for personal finances over the next 12 months declined by three points to -21, three points lower than last year. On a more positive note, the index measuring the general economic situation of the country in the last 12 months increased by three points to -62. However, it is still 11 points lower than March 2022. The expectations for the general economic situation over the next year improved by three points to -40, showing a nine-point improvement compared to last March.

The major purchase index saw a four-point increase to -33, but it still remains nine points lower than it was a year ago. In contrast, the savings index increased by two points to +21. This indicates that consumers are prioritizing saving money rather than spending it.

Joe Staton, Client Strategy Director of GfK, emphasized that while the recent budget may provide some relief to certain sections of the population, many individuals are still focused on day-to-day survival. The top concern for consumers across the UK remains having enough money to cover living expenses and bills.

Although the slight increase in consumer confidence is a positive sign, the ongoing worries about personal finances and the general economic situation suggest that there is still a long road to full economic recovery for the UK. It will be crucial to closely monitor future developments and government interventions to gauge their impact on consumer confidence and spending patterns.

Useful links:
Link 1: How to Manage Personal Finances in Uncertain Times
Link 2: The UK’s Economic Outlook and Recovery