Some slight improvement in the weather forecast in May, with headline GfK consumer confidence rising 2 points to -29, its best level since February. A jump in optimism about the economy and in personal finances was behind the May improvement – not uncommon in May which is the month when historically confidence is most likely to improve.
Outlook
Major national events will dominate consumer sentiment this summer and should induce a greater national togetherness. The Diamond Jubilee celebrations certainly achieved this, and with the on- going Olympic Torch journey across the country, the UK has much to cherish and inspire as the build-up to the London Olympics intensifies. Sunshine would help to brighten the mood.These once-in-a-lifetime events help to offset the difficulties of day to day financial reality with little sign of any let up in the squeeze on household budgets. The problems of the euro-zone remain - not least in the banking sector - where funding difficulties are having a significant impact on the ability of UK banks to avoid raising mortgage rates.
Around the UK...
Across the UK confidence continues to vary. Last month’s collapse in Londoners confidence may have been related to uncertainty over the Mayoral election. In May confidence rebounded strongly both in London (up 9 points to -22) and the South East (up 6 points to -23). Confidence also picked up in the Midlands (up 2 points to -29) and in Northern Ireland (up 3 points to -37).Only in Wales (down 2 points to -34) and the North (down 1 point to -33) is sentiment lower. In the latter region, weaker confidence in the North West to its lowest level of the year (-34) drove the measure down. There was no change in confidence in May in Scotland (-30).Compared to a year ago when the impact of the Royal Wedding, a spell of fine weather and a belief that things may be getting better saw an 8-point surge in confidence, all regions are lower. Only in London (down 2 points), the South and Scotland (both down 4 points) is the measure below the 8-point national fall. Elsewhere it is between 10-12 points below.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.Source: GfK NOP / European Commission / JGFR
