UK consumer sentiment returned to a two-year high this month, according to the GfK consumer confidence index published on Friday.
Sentiment rose as households took a more positive view of the economy and their own finances.
The long-running survey revealed on Thursday that the index rose to -19 in April from -21 in March.
This matched January’s reading, which was the highest since January 2022 just before the Russian invasion of Ukraine triggered a rise in energy costs and other bills.
Economists polled by Reuters had predicted a slightly smaller rise of -20. Last year, the index stood at -30.
Growth from Knowledge (GfK) client strategy director Joe Staton said of the results, “These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.
“However, we are a long way from the much firmer sentiment last seen in the period before Brexit, Covid and the conflict in Ukraine.”
Inflation fell to a two-and-a-half year low of 3.2% low in March, and grocery inflation fell for the 16th consecutive month, according to data from Kantar.
April brought a nearly 10% increase in Britain’s minimum wage, as well as a two percentage point cut in the rate of national insurance contributions paid by employees.
The UK’s finance minister Jeremy Hunt has said he wants to cut tax further if there is room in the public finances.
Hunt wants to make the change before Prime Minister Rishi Sunak calls an election as he is expected to later this year.
