May’s strong increase in consumer optimism proved short lived with the headline GfK measure giving back 4 points of the 10-point May gain and dropping to -25, still at recession level, and 6 points lower than in June 2010. All 5 sub-indices moved lower.
Underlying measures of inflation and unemployment expectations continued to improve in June. Savings confidence declined more than spending confidence, with fewer households currently saving. More positively, households appear to be better managing debt than earlier in the year. With a very unsettled economic and political environment people are likely to remain cautious about spending and more likely to pay off debt.
Around the UK…..
Confidence continued to be strongest in London, the South and Midlands and weakest in the North, Wales, Scotland and Northern Ireland. In all regions apart from London and the South confidence fell in June, dropping most in Northern Ireland. In London confidence gained 3 points to -17, its highest level since last November, and in the South confidence is unchanged at -21.Confidence in all regions is below a year ago.