Households in the UK reported feeling positive about their personal finances for the first time in two years as consumer sentiment held steady in March, a survey has shown.
The GfK (Growth from Knowledge) consumer confidence index remained at -21 in March, unchanged from February.
This was slightly below forecasts by a Reuters poll of analysts of -19.
However, GfK’s measure of households’ expectations for their personal finances rose +2 from 0 last month.
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GfK’s client strategy director Joe Staton said, “The improved personal finance measure… is encouraging because it’s the first positive and the highest score since December 2021.
“This is welcome news given the challenges face by Britons of fiscal drag, higher costs for fuel, rising council taxes and utilities eroding any increases in wages or other income.”
British consumer price inflation fell more than expected in February, reaching 3.4%.
The Bank of England (BoE) expects inflation to fall below its 2% target during the second quarter following Jeremy Hunt’s decision to freeze fuel duty.
However, the BoE has continued to hold interest rates at a 16-year high of 5.25% due to fears inflation may increase due to rising wages, among other factors.
BoE governor Andrew Bailey – who voted to hold interest rates – said he was hopeful about the trajectory of inflation, but needed to see further evidence before cutting interest rates.
GfK also reported a decline in its sub-index of major purchases, continuing from last month.
Staton said that today’s figures from GfK raised questions about Britain’s economy. He also noted the timing as Prime Minister Rishi Sunak is expected to call a general election this year.
Staton said, “Are we temporarily on pause, or are consumers about to press ‘reverse’?
“In the run-up to the next UK general election, these are important questions for the future health of the economy.”
Read More: UK Inflation Falls More Than Expected In February
