20 JUNE 2024
UK consumer confidence has rebounded strongly from its late 2022 record low, hitting a 2-year high in May. It should continue to rally over the next couple of months because the reading has historically improved during General Election campaigns.
The upturn in confidence is, however, at odds with the consumer spending data, which remains lacklustre.
On the one hand this isn’t unusual. Consumer confidence indicators are typically survey-based and often what respondents say they are feeling differs vastly from how they behave.
On the other hand, the divergence likely reflects the challenging economic backdrop.
Spending on non-essential items has been sluggish for some time, whereas purchase of non-discretionary goods and services (e.g. fuel and food) has been solid, mainly due to higher prices.
This means overall consumer expenditure is holding up reasonably well. It’s just that most households are spending a disproportionate amount on what they need, not what they want.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed are a matter of opinion but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
Key trends in portfolio management
Is India Leaving the “Fragile EM” Era Behind?
Discussion on the unrest in the Middle East
