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Economic Development

Brits' consumer confidence rises in February - but cost-of-living crisis is 'far from over'

Consumer confidence has risen, driven by improved personal finances and a more positive outlook on the general economy, but remains lower than 12 months ago

Shoppers in a town centre high street(Image: Surrey Live - Grahame Larter)

Confidence among British consumers showed an uptick in February, spurred by improvements in personal financial situations and a more positive perception of the general economy; however, there is still a shortfall when compared to the previous year.

The GfK index, which tracks changes in personal finances over the last twelve months, increased three points to -7, marking a seven-point improvement on February 2024, as reported by .

Furthermore, the major purchase index ascended three points to -17, eight points higher than in February 2024, whilst expectations for the general economic outlook over the next year elevated three points to -31.

Neil Bellamy, Consumer Insights Director at NIQ GfK, highlighted, "The biggest improvement is in how consumers see their personal finances for the coming year," citing that the cut to the Bank of England base rate might have "brightened the mood for some people."

Despite the more upbeat sentiment, inflation continues to exert pressure on confidence levels, with average prices witnessing an unforeseen three percent increment in January.

"The majority [of Brits] are still struggling with a cost-of-living crisis that is far from over," Bellamy advised, noting that price surges are outpacing the Bank of England's targets and that energy costs persist as a significant burden for numerous households.

GfK data indicated that consumer views on the general economic condition remain subdued compared to a year ago, implying limited expectations for any immediate significant economic recovery, as per Bellamy's insights.

Nevertheless, retail sales experienced a boost in January, but analysts attributed this growth to an increase in consumers seeking out deals rather than a genuine rise in disposable income.