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UK CONSUMER CONFIDENCE REACHES RECORD LEVELS

Levels of UK consumer confidence have reached their highest point in ten years, according to the latest results from the Deloitte Consumer Tracker.

The Deloitte Consumer Tracker measures UK consumer confidence on a quarterly basis. According to the Tracker’s Q1 2021 measurement, consumer confidence jumped six percentage points in the first three months of 2021 to -11%. This is the fastest rate of quarterly growth in the Deloitte Consumer Tracker’s ten-year history.

Every measure of confidence saw both year-on-year and quarter-on-quarter growth, as consumers journey out of lockdown with a spring in their step.

Deloitte’s analysis is based on responses from more than 3,000 UK consumers between 19th-22nd March 2021, as the UK’s phased lockdown easing remained on track.

With restaurants and physical non-essential retail remaining closed in Q1 2021, consumers’ pockets improved this quarter. Household disposable income saw a seven percentage point boost to -10%; marking a 17 percentage point improvement compared to the same period last year. Further, consumers’ confidence in their level of debt has tipped over to the black, at 1%, for the first time in ten years.

Ian Stewart, Chief Economist at Deloitte, commented: “The UK is primed for a sharp snap back in consumer activity. High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.”

The start of the pandemic in Q1 2020 saw economic sentiment plunge to an historic low. However, armed with a clear map out of lockdown, extended furlough support through to the autumn, and the vaccination programme continuing, consumer sentiment on the state of the economy grew to -61%, a quarterly rise of 12 percentage points.

With CFOs also hiring at their highest levels for nearly six years, consumers are optimistic about both their job security, and opportunities and career progression; each up by six and seven percentage points, respectively.

With late June earmarked for the last of social distancing measures to lift, consumers expect to increase their spending across almost every essential and discretionary category. Net discretionary spending is anticipated to become positive for the first time, meaning the number of consumers expecting to spend more exceed those anticipating to spend less.

Reflecting consumer eagerness to spend, ‘going to a shop’ topped the list of leisure activities consumers are most likely to do after lockdown, with 63% saying they’d plan to return within a month of measures lifting.

Ben Perkins, Head of Consumer Research at Deloitte, commented: “Although April 12th marked what many hope will be the permanent reopening of non-essential retail stores, mass remote working will continue to impact footfall on the High Street. Shopping behaviours have changed significantly during the pandemic, with some consumers discovering the convenience of online retail for the first time. It’s likely that many of these changes will continue beyond the end of the pandemic. Whether shopping online or in-store, though, if consumers remain confident about their income, then an increase in consumer spending could become the driving force for growth as the economy reopens.”

https://www2.deloitte.com/uk/en.html

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