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UK Consumer Confidence Rose in July, Beating Expectations

By Xavier Fontdegloria

 

Consumer confidence in the U.K. rose in July, edging ahead of pre-Covid-19 levels, amid the easing of almost all virus-related restrictions in England and despite a rise in infections across the country.

Market-research firm GfK's consumer-confidence indicator came in at minus seven in July, up two points from June. Economists polled by The Wall Street Journal had forecast an unchanged reading at minus nine.

The index has posted strong increases since February amid a swift vaccination campaign and gradual reopening of the economy. However, the gains have shrunk in the last two months--confidence stalled in June--amid the spread of the more contagious Delta variant.

Among the five measures that make up the consumer-confidence barometer, three of them increased, one was unchanged and one decreased in July compared with June.

U.K. households' personal finance expectations for next year remained strong, and July's data points to a sharp jump in consumers' purchasing intentions, GfK's Client Strategy Director Joe Staton said. "The healthy seven-point rise [of the major purchase index] aligns with strong retail growth figures that reflect the gradual unlocking of the U.K. high street and release of pent-up demand as Britons hit shops, restaurants and venues," he said.

Despite the better assessment on current conditions, consumers' views of the general economic situation over the year ahead deteriorated, with the index falling three points. Increasing consumer price inflation, rising Covid-19 cases and the end of furlough programs are factors behind the fall and could put a brake on the confidence rebound, Mr. Staton said.

The survey polled around 2,000 individuals between July 1 and 14, days before England dropped almost all coronavirus restrictions, including mask requirements and size limits on gatherings. The strategy contrasts with that of other countries in Europe, which opted for tightening some measures to stem contagion levels while accelerating mass vaccination.

"What happens across the remaining summer months will frame consumer confidence for the rest of 2021 and beyond," Mr. Staton said.

 

Write to Xavier Fontdegloria at [email protected]

 

By Xavier Fontdegloria

 

Consumer confidence in the U.K. rose in July, edging ahead of pre-Covid-19 levels, amid the easing of almost all virus-related restrictions in England and despite a rise in infections across the country.

Market-research firm GfK's consumer-confidence indicator came in at minus seven in July, up two points from June. Economists polled by The Wall Street Journal had forecast an unchanged reading at minus nine.

The index has posted strong increases since February amid a swift vaccination campaign and gradual reopening of the economy. However, the gains have shrunk in the last two months--confidence stalled in June--amid the spread of the more contagious Delta variant.

Among the five measures that make up the consumer-confidence barometer, three of them increased, one was unchanged and one decreased in July compared with June.

U.K. households' personal finance expectations for next year remained strong, and July's data points to a sharp jump in consumers' purchasing intentions, GfK's Client Strategy Director Joe Staton said. "The healthy seven-point rise [of the major purchase index] aligns with strong retail growth figures that reflect the gradual unlocking of the U.K. high street and release of pent-up demand as Britons hit shops, restaurants and venues," he said.

Despite the better assessment on current conditions, consumers' views of the general economic situation over the year ahead deteriorated, with the index falling three points. Increasing consumer price inflation, rising Covid-19 cases and the end of furlough programs are factors behind the fall and could put a brake on the confidence rebound, Mr. Staton said.

The survey polled around 2,000 individuals between July 1 and 14, days before England dropped almost all coronavirus restrictions, including mask requirements and size limits on gatherings. The strategy contrasts with that of other countries in Europe, which opted for tightening some measures to stem contagion levels while accelerating mass vaccination.

"What happens across the remaining summer months will frame consumer confidence for the rest of 2021 and beyond," Mr. Staton said.

 

Write to Xavier Fontdegloria at [email protected]




      

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