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UK consumer confidence continues to struggle

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Consumer confidence increased in May but was still in negative territory, according to an index.

GfK’s Consumer Confidence Index rose two points this month, but positive feelings about personal finances were not enough to cancel out concerns about the wider economy, keeping the overall score at minus seven.

Joe Staton, client strategy director at GfK, said consumers remain “resolutely downbeat about the general state of the economy”.
He added: “These negative economic scores are depressing the overall index and preventing it from breaking out into positive territory.
“We have been at zero or negative for 29 months now. When will the strong jobs market and rising real incomes, coupled with ongoing low interest rates and low levels of headline inflation, have an impact?
“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.”
The index, which relies on a sample of 2,001 people with a breakdown representative of the UK population, found that confidence in personal finance for the year ahead increased four points to eight – four points higher than in May last year.
The measure for the general economic situation of the country during the last 12 months also increased, by five points to minus 24, but remains four points lower than May last year.

Expectations for the general economic situation over the next year have risen three points to minus 21 – the same level as last May.
A two point drop in the major purchase index suggests people are putting big item purchases on hold.

Image: The UK car industry has seen some growth in production
Meanwhile, UK car production rose in April, with demand up 5.2% year-on-year, according to figures from the Society of Motor Manufacturers and Traders (SMMT).
Some 127,952 cars were built in British factories and manufacturing for home and overseas markets grew by 7.3% and 4.7% respectively.
Mike Hawes, SMMT chief executive, said: “While April’s growth isn’t altogether surprising given the significant decline in output this time last year, it is good to see earlier planned investment into new models delivering results.

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“However, given such investment was made on the basis of the free and frictionless trade afforded by our EU membership, the ability of UK plants to attract the next wave of new models and drive future growth depends upon maintaining these competitive conditions after Brexit.
“That’s why it is critical that government acts to safeguard our participation in the EU customs union and single market.”

Source: SKY