UK consumers began 2018 in a less downbeat mood as Brits reported improved confidence in their financial situation for the coming year, according to a survey.
Research house GfK’s consumer confidence index increased by 4 points to -9 in January.
The score reflects an improvement in consumers’ views on their personal financial situation over the past 12 months as well as improved expectations for the year ahead. Consumer views of the U.K.’s economic situation in the past year and in the coming 12 months also improved.
All five measures used to calculate the index increased in January as the demand for major purchases, like furniture or washing machines, saw the biggest rise, climbing by five points to one. The index tracking the personal financial situation over the next 12 months increased to six from two in December while the outlook for the general economy edged higher to -24 from -28 in the previous month.
However, Joe Staton, head of market dynamics at GfK, cautioned that the headline measure of consumer confidence remained in negative territory and was lower than at the same time in 2016, when it stood at -5.
“In the absence of good news about rising wages and declining inflationary pressures, this off-trend number could be a temporary blip rather than a strong sign of recovery,” Staton said.
Inflation stood at three percent in December, close to the quickest in nearly six years. Wage growth has failed to keep pace with the acceleration, fueled by the pound’s drop in 2016. It may ease this year, and sterling’s recent appreciation could help.
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