Confidence among U.K. consumers rose for third consecutive month in April to its highest level in more than a year, indicating that momentum toward an economic recovery could be building, despite cost-of-living pressures from sky-high inflation.
Research firm GfK said its consumer-confidence barometer stood at minus 30 in April compared with minus 36 a month earlier, an improvement on the minus 34 expected by economists polled by The Wall Street Journal.
The reading is the highest since the minus 26 registered in February 2022, but remains subdued by historical standards, as confidence recovers from a record low of minus 49 in September. That period was marked by elevated energy prices, prompted by Russia’s invasion of Ukraine.
The rise in sentiment was driven by consumers’ better assessment of their personal financial situation over the next 12 months and general economic situation over the last year, the data showed.
“The eight-point jump in how we see prospects for our personal financial situation is a dramatic change that might suggest household finances are stronger than we thought,” Joe Staton, Client Strategy Director GfK, said.
All components measures by GfK were up in comparison to last month’s print.
It comes after data this week showed the U.K.’s inflation rate in February edged down only slightly to 10.1%, as food prices accelerated and core inflation–a key measure for the Bank of England which strips out food and energy–still growing. The central bank’s policy committee meets again next month to decide whether to raise rates again.
