British consumer confidence rose again in February to the highest level in almost a year, a sign of household resilience despite the cost of living crisis, according to data published on Friday.
Research group GfK said its consumer confidence index, a closely watched measure of how people view their personal finances and wider economic prospects, rose seven points to -38.
Beating the consensus forecast of -43, it was the highest reading since April 2022 for the index, which fell to a record low in January. The measure remains below zero, but shows that most respondents report a decline in confidence.
Joe Staton, GfK’s director of client strategy, said that although February’s score was “still depressed”, consumers were “suddenly showing optimism about their personal finances and general economic conditions, especially in the year ahead”.
Survey respondents, based on interviews conducted between February 1 and 13, are more optimistic about the year ahead, as a sub-index measuring the general outlook on future economic conditions rose by 11 points between January and February.
Consumers also report a recovery in confidence about their personal finances, as well as a desire to make expensive purchases.
The savings index, which measures how well consumers will put money away but is not included in the overall score, rose from 14 to 19 – a level five points higher than in February last year.
The uptick in all five measures included in the overall index suggests that consumers may be in for a “milder-than-expected recession”, Staton said.
The survey followed encouraging official data, which showed that the UK avoided contraction in the final quarter of 2022, while the labor market remained resilient despite economic problems.
Headline inflation eased to 10.1 percent in January, down from a 41-year peak of 11.1 percent in October, the Office for National Statistics said last week.
Meanwhile, public finances registered a shock £30bn in the fiscal year to January, the ONS said on Tuesday, rewarding chancellor Jeremy Hunt for extra support for households in the spring Budget on March 15.
Overall, consumer confidence in February was 12 points lower than in the same month in 2022, as rising energy bills and higher interest rates and food prices squeezed household budgets over the past 12 months.
“[Consumer] sentiment as well as the economy remain far from pre-lockdown levels,” Staton said, “but modest consumer resilience may be needed to moderate the downturn in 2023.”