Despite a delay in the lifting of the remaining lockdown restrictions — now scheduled for July 19 — according to the UK government’s step by step road map, announced back in March, consumer confidence has remained resilient, and continued to rise with economic activity marching towards pre-pandemic levels, a closely watched survey has revealed.
Data from GfK shows overall consumer confidence remained unchanged over the last month at minus nine on the index in June 2021 and this is up significantly from minus 30 in June 2020. Elevated household confidence levels are likely to have been caused not just by economic activity continuing to drive toward pre-pandemic levels but also the success of the vaccination rollout.
Households’ outlook about their future financial position is trending higher. GfK’s Consumer Confidence Index shows forecasts for personal finances over the next 12 months rose one point to 11. Joe Staton, client strategy director GfK, said: “A repetition of last month’s score doesn’t mean confidence is about to nose-dive. The upwards trajectory for the Index since the dark days at the start of the pandemic is currently still on track.”
Inflation poses threat to economic recovery: GfK’s index pointed to mounting concerns over whether rising inflation could dampen the UK’s economic recovery from the pandemic if higher prices result in consumers reining in spending.
The Bank of England has held interest rates at a record low despite forecasting that CPI inflation will run above its target to reach three per cent. Staton added “forecasts for rising retail price inflation could weaken consumer confidence quickly and that may cause a dip in the measure for the wider economy in the coming year.”
Expectations for the general economic situation over the coming 12 months is still 46 points higher than at this time last year. Propensity to save money continues to remain high despite the reopening of the UK high streets, with the Savings Index standing at +1 in June.
With consumer confidence high, the number of shoppers in retail destinations rose in June, with a combination of warm weather, a bank holiday and school half-term tempting shoppers back to the high street. While the number of shoppers on the high street rose quite rapidly according to the latest data from Springboard, footfall in shopping centres and in retail parks was slower by comparison.
Coastal and historical towns saw the biggest uplift in shoppers, up 37.1pc and 24.8pc respectively, though city centres also saw a boost, with footfall in Central London up 23.8pc.
Springboard insight director Diane Wehrle said: “A combination of the late May bank holiday, incredible weather and the school half term holiday had a hugely beneficial effect on customer activity in UK retail destinations; it not only led to the greatest weekly increase in footfall since the reopening of non-essential retail in April, but also the most modest annual decline since the start of the pandemic.”
Wehrle said staycations had fuelled an increase in footfall in coastal towns, while the warm weather made for a particularly good month for the high street, where people could spend time outside. Adding to the confidence of consumers are the food and hospitality trades which had been particularly hard hit by lockdown and are now able to welcome visitors to hotels, restaurants and bars.
The financial district of London, known as the ‘City’ has always been a place where culture, heritage work and leisure meet. All these sectors have seen some of the hardest hits by restrictions. It’s a huge relief to them that they are able to open their doors to the public. (The writer is our foreign correspondent based in the UK)
Oman Observer is now on the WhatsApp channel. Click here
