Consumer confidence has surged to its highest level since 2021, driven by mounting optimism about the economy's future performance, according to a pivotal survey.
The GfK consumer confidence index, which dates back to the 1970s, climbed to -14 in June from -17 in the previous month. This marks the strongest reading since November 2021 and represents the third consecutive month of improvement, surpassing expectations set by City analysts.
The upturn in confidence is largely attributed to positive sentiments surrounding the economy following Britain's exit from a brief recession earlier this year. GfK reported a six-point increase in optimism about economic prospects over the next year, reaching -11. Additionally, sentiment regarding the economy's performance over the past 12 months surged by seven points to -32.
This data adds to the growing evidence suggesting a potentially brighter economic outlook post the July 4 general election. Recent figures from the Office for National Statistics revealed that inflation had dropped to the government's target of 2 percent for the first time since July 2021. Furthermore, GDP expanded by 0.6 percent in the first quarter of this year, placing it among the fastest growth rates in the developed world.
Rishi Sunak, commenting on the decline in inflation, portrayed it as a sign of economic normalisation since assuming office in October 2022, when inflation was in double digits.
