Consumer Confidence Weather Forecast - gloomy conditions remain

April’s cool wet weather is reflected in a gloomy consumer confidence reading. Headline GfK confidence is unchanged at -31, compared to March and a year ago. Such a sentiment level points to no / very low growth with last month’s confirmation that the UK economy had slipped into the first double-dip recession since the 1970s coming as no surprise.

Outlook

Inflation expectations have increased sharply in the past two months and with little income growth in prospect, consumer spending is likely to remain constrained. This summer’s historic combination of major national events will induce greater countrywide togetherness, although the expected economic benefits have yet to stimulate increased public optimism. Until the job market begins to improve the economic outlook will remain very uncertain.

Around the UK.....

Across the UK confidence continues to vary. A mini-collapse in Londoners confidence (down 6 points to -31) does not bode well for the economy or for the Olympics.

Confidence is higher than the UK average in the South and Scotland (both -30). Only in Scotland is sentiment higher in the month, up by 3 points, and at its highest since last September. The last time confidence was higher in Scotland than in London was in February 2010. Confidence is 1 point lower in the South overall with falls in London and the South West offsetting a 3-point gain in the South East,

In Wales and Northern Ireland sentiment reversed gains in March, down by 2 points and 4 points to -32 and -40 respectively.

In the North and Midlands confidence is unchanged at -32 and -31 respectively. While there is little change within the 3 northern regions, in the Midlands, strong gains in the East Midlands and the East of England are negated by a slump in the West Midlands.

Compared to a year ago confidence is higher in Wales, up 6 points, in Scotland (up 2 points) and in the South (up 1 point). Biggest year-on-year reverse is in Northern Ireland (down 5 points). Both London and the Midlands dropped 2 points. There is no change in the North.

Spending and saving confidence and activity varies considerably across the UK. For planning marketing / sales campaigns increasingly regional awareness of consumers’ financial behaviour is required.

Click on the images above to see the outlook in full.

Source: GfK NOP / European Commission / JGFR