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UK Consumers Most Confident Since Pandemic Struck: GfK

Published on Feb 19 2021 8:59 AM in Retail tagged: UK / Consumer Confidence / GfK / Pandemic

UK Consumers Most Confident Since Pandemic Struck: GfK

British consumers are their most confident since the COVID-19 pandemic struck almost a year ago, buoyed by hopes that the country's fast COVID-19 vaccinations programme will boost the economy, a survey showed on Friday.

The overall consumer confidence index from market research firm GfK rose five points to -23, due mostly to a 14-point improvement in views about the economy over the next 12 months.

A Reuters poll of economists had pointed to a much smaller improvement in the overall index to -27.

The Challenges Ahead

Joe Staton, GfK's client strategy director, warned that it was more realistic to look at the challenges ahead than think about a return to normality.

"We need to be cautious because the positive tailwinds of the vaccination roll-out are being met by the very strong headwinds of unemployment, the threat of inflation and the difficulty that many face in affording day-to-day living costs," he said.

Finance minister Rishi Sunak is expected to announce more jobs support in a budget plan on March 3.

Prime Minister Boris Johnson is moving cautiously with regard to lifting social distancing restrictions that contributed to the economy shrinking by 10% last year, the most in three centuries.

Emergency Rescue Programme

But Sunak is expected to start weaning the economy off his nearly £300-billion ($419 billion) emergency rescue programme as soon as he can.

In February last year before the pandemic hit, GfK's overall confidence index stood at -7.

Britain went its third national lockdown last month which has forced many businesses to close.

But the prospects for a recovery in the economy have improved as the country rolls out Europe's fastest COVID-19 vaccination programme to date.

GfK's measure of how willing consumers are to make major purchases improved to -19 but remained well below its level of +6 in February 2020.

The Bank of England is watching closely to see if households go on a spending spree when the current lockdown is lifted after an enforced period of savings while they were stuck at home.

News by Reuters edited by Checkout. Click subscribe to sign up for the Checkout print edition.

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