UK consumer confidence hits best level in two years - Deloitte

UK consumer confidence hit its highest level in two years in the first quarter of 2024 as inflation eased, according to a survey released by Deloitte on Friday.

The Deloitte Consumer Tracker rose 6.5 percentage points on the same period a year earlier. This marked the sixth consecutive increase and put the measure at its best level since the third quarter of 2021.

The tracker is based on responses from 3,198 UK consumers aged 18+ surveyed between 15 and 18 March 2024.

Deloitte pointed to a "significant" improvement in sentiment towards household disposable income and an increase in sentiment towards debt levels, which it said painted "a much more positive" picture of how consumers are feeling about their personal finances.

Céline Fenech, consumer insight lead at Deloitte, said: "It is encouraging to see that consumers are feeling more confident in their personal finances - particularly younger consumers. Many consumers are paying less for essentials such as utility bills and groceries as inflation falls. However, spending on non-essential goods and services dropped this quarter, meaning that improving confidence is not yet translating to a significant boost to spending, and cautious optimism is required.

"There are some positive signs that consumers might be starting to loosen their purse strings, with more wriggle room for spending on discretionary items or services. We are seeing the rate at which consumers are increasing their defensive behaviours easing, for example fewer consumers buying goods on promotion or from cheaper supermarkets.

"Consumer confidence at its highest level in two-and-a-half years combined with the weather hopefully improving, should signal a brighter outlook for the consumer sector."