UK consumer confidence increases in final quarter of 2019
With retail sales decreasing in December and 2019 being the worst year for retail in 25 years it comes as a surprise that consumer confidence actually increased by 0.5% in the final quarter of 2019. As December’s General Election provided more political clarity, statistics show consumers now have more confidence in the economy, personal finances and job security, however this increase in consumer confidence didn’t translate into higher spending.
Consumer confidence rises to record high
The latest data from the IHS Markit UK Household Finance Index says that UK households predict ‘solid improvements’ in their financial health over the next year. The Household Financial Index delivered a record increase up to 47.6 in February 2020 an increase of 3 compared to January 2020. This is the highest ever recording since they began measuring eleven years ago.
Whilst this is still below the neutral score of 50, the rise does suggest that the financial challenges faced by households are weighing less heavily as we go through 2020. This is further evidenced as the future Household Finance Index shows that many UK households predict they will see an improvement in their financial health over the next 12 months with scores predicted to increase over the next 12 months to 49.6 in January 2021 and 52.7 in February 2021 .
Economist at IHS Markit, Joe Hayes has said: “Survey data are leading the way for information on the post-election and post-Brexit period in the UK, and our latest Household Finance report signals a number of developments that should keep the Bank of England doves at bay and build optimism towards the UK’s immediate economic prospects.”
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