A positive reaction to the Budget, coupled with the UK’s successful vaccine rollout and a roadmap for the end lockdown, is putting consumers in the mood to start spending their ‘accidential savings’.
Well-received Budget measures and the continued rollout of the Covid-19 vaccine have seen UK consumer confidence take a positive turn this month, according the latest GfK Consumer Confidence Index.
The overall Index has risen by seven points to -16 in March. Each of the five measures that make up the Index have improved since the figures recorded in February, showing consumers feeling far more optimistic about their economic situation.
“We talked last month of vaccination tailwinds encountering the financial and livelihood challenges of the Covid-19 epidemic,” GfK client strategy director Joe Staton tells Marketing Week. “But that caution now seems misplaced as this month we can celebrate the highest consumer confidence score since this time last year, with all measures up.”
The consumer view of the general economic situation over the next 12 months has surged upwards by 13 points, to -17. In January the measure languished at -44, and in March 2020 it was at -27.
Consumer confidence in their personal financial situation over both the last 12 months and the coming 12 months has risen by six points to -2 and 10, respectively.
Confidence in making major purchases is up by eight points to -11. The measure was at -24 in January 2021.
“For the best part of a year, we have had headline scores mired in the minus 20s or minus 30s, and everybody wondering when the bad news was going to end. Now we have a new trend: the consumer mood is on the mend at long last,” says Staton.
He reports that consumers are now better prepared to spend and are “significantly more optimistic” both about their personal finances and how the wider economy is shaping up.
“The last time we had a -17 for ‘economy in the coming year’ was October 2016, for example. It’s all looking much more buoyant and people want to move on from the Covid-19 epidemic. Consumers can’t wait to fire up the BBQ, hit the shops and spend their accidental savings,” Staton says.
GfK puts the promise of relaxed Covid-19 restrictions and appropriate support for business as key reasons behind the improved figures.
“Spring is in the air on the back of well-received Budget announcements, the successful vaccine rollout and roadmaps in place for ending lockdown,” adds Staton. “This marks an improvement each month into 2021. The personal finance measure for the next 12 months is now at +10, the first time in three years it has been this high.”