UK consumers cautious as economy reopens - GfK

GfK's consumer confidence index rose 1 point to -15 after a 7-point jump in March as people's view of their personal finances held steady but households were less likely to make a big purchase.

Consumers' view of the general economic situation over the next 12 months and the past year improved improved. Households' view of their own finances over the next year was unchanged at 10 while their judgement on the past year dipped to -3 from -2.

After an 8-point increase in March GfK's major purchase index dropped 1 point to -12, indicating caution about splurging money saved during lockdowns on a new car or another large item. Retailers and other customer-facing businesses are hoping consumers will loosen their belts after a year of lockdowns and restrictions.

Joe Staton, GfK's client strategy director, said: "Confidence has edged up one point in April with consumers taking a more guarded view on the future. The improvement in the consumer mood since January is welcome but the pandemic has hit household finances hard and, on the road ahead, we will still see concerns over new variants, rising inflation and the debt overhang."

"Nevertheless, there’s every chance that as the recovery gains momentum and the numbers get stronger, confident consumers will continue to spend and drive the wheels of UK finances into the summer and beyond.”

GfK conducted its survey in the first two weeks of April as consumers were waiting for the reopening of non-essential shops on 12 April with the rest of the economy scheduled to open up by the end of June. Early surveys have been encouraging but struggling businesses need a sustained recovery.