Finance index suggests consumer confidence steady

Household spending has been a big driver of growth
Household spending has been a big driver of growth

Consumer confidence remained stable in March as households carried on spending, prompting an early prediction that forecasts of a post-Article 50 slump “could be proved wrong”.

The GfK Consumer Confidence Index remained at minus six after dropping by one point in February.

The index measuring changes in personal finances during the last 12 months increased by one point this month to plus two, while the measure for the general economic situation of the country during the last year remained at minus 21, 11 points lower than March 2016.

But the major purchase index, which measures consumers’ appetites for making big ticket item purchases, increased by one point to plus six.

The savings index also increased by three points to minus one, one point higher than this time last year.

Joe Staton, head of market dynamics at GfK, said: “No real upsets this month as the barometer continues to bump along in negative territory.

“Consumers remain cagey about the state of their personal finances and the general economic picture for the UK, especially as wage growth fails to keep pace with the rising costs of living.

“Since the Brexit referendum, household spending has been a big driver of growth, so any slump will dent future economic prospects.

“However, if we carry on shopping, as seen by the uptick in the major purchase index, then forecasts for a post-trigger/pre-Brexit slowdown could be proved wrong.”

Rising fuel and food prices pushed inflation beyond the Bank of England’s 2% target in February, hitting its highest level since September 2013, according to latest figures.

The Office for National Statistics said the Consumer Price Index (CPI) measure of inflation reached 2.3% last month, up from 1.8% in January.

The supermarket price war had kept a lid on rises, but food was becoming more expensive as producers pass down soaring import costs triggered by the pound’s slump since the EU referendum result.