Plans to reopen the economy, new Budget support for workers and businesses, and rapid vaccine rollout have boosted UK consumer confidence to its highest level since before. First lock in March last year, boosting hopes for a recovery in spending.
According to research firm GfK, the UK’s consumer confidence index, a closely watched metric of how people view their personal finances and broader economic prospects, rose 7 points. to negative 16 in March, according to research firm GfK.
Reading, based on data gathered between March 1 and 12, is the largest monthly increase in nearly a decade. It is better than the negative 20 forecast of economists polled by Reuters and the highest score since March 2020, when the data reflects the pre-key period.
Joe Staton, director of customer strategy at GfK, commented on the results: “Spring is coming with well-received Budget announcements, successful vaccination rollouts, and a roadmap to end love door lock status ”.
The budget at the beginning of March extended public support to businesses and workers, improving morale with the decreasing number of Covid-19 infections. However, the data has been collected previously News This week appeared the possibility of a vaccination delay as the UK faces a significant reduction in vaccine supplies.
According to Staton, the “highly likely” sentiment increase will continue for the next six months. “If this improved mood translates into spending, it could help reverse some of the economic losses the UK has suffered.”
Expectations for the overall economic situation are highest as the economy is expected to recover from the biggest recession in 300 years when it reopens.
However, the assessment of consumers’ past and future personal finances also lights up significantly, and the proportion of people saying that it is a good time to make big purchases increases. forward.
Economists closely monitor confidence metrics in personal finances because they are seen as a good indicator of spending intentions, a key factor in the speed of recovery.
Howard Archer, chief economist at EY Item Club, said the scale of the increase in large buying intentions is “a good omen” of spending.
He added: “The sharp increase in consumer confidence in March was a positive development that created confidence that consumers can play a leading role in the strong recovery from the second quarter as the economy continues to grow. the more the door opens ”.
Households have amassed more than £ 160 billion in bank savings, according to to separate data from the Bank of England. Economists believe that if consumers are confident in their personal finances, they can spend a larger proportion of that savings on goods and services, creating a strong incentive for economic growth. Expected economic recovery.
Experimental credit and debit card transaction data released by the Office of National Statistics shows that while continuing to be limited, spending has increased minus 20% from the February 2020 average in the week to March 11, up from minus 28% for the same week. last year. All spending areas, from food to entertainment, are in an uptrend.