U.K. consumer confidence unexpectedly declined in April as inflation extended its run above the Bank of England’s goal, increasing households’ concern about their personal finances.
A sentiment index by GfK NOP Ltd. fell one point to minus 27, the London-based group said in a report today. Economists had forecast no change, according to the median of 19 estimates in a Bloomberg News survey. A gauge of how consumers see their finances over the next year fell to minus 7 from minus 6.
Inflation was at 2.8 percent in March and the BOE forecasts it will accelerate in the coming months. That compares with the central bank’s 2 percent target and wage growth of 1 percent. The Confederation of British Industry said on April 24 that its retail-sales index unexpectedly fell this month to an eight-month low.
“A move up would suggest that the index had indeed ‘paused for breath’ after its rise at the end of 2012 and was still heading in the right direction,” said Nick Moon, managing director of social research at GfK. The decline “implies the recovery in confidence has stalled, and real recovery looks a long way away.”
An index of shoppers’ outlook for the economy in the coming year rose 1 point to minus 26 this month, GfK said. A gauge of their views on the climate for making major purchases fell 2 points to minus 25.
Britons’ assessment of their financial situation in the past 12 months fell 4 points to minus 24, and a gauge of their view of the general economic situation in the period rose 1 point to minus 53.
Data last week showed the U.K. economy grew 0.3 percent in the first quarter, avoiding a triple-dip recession. Still, unemployment rose at the fastest pace in more than a year in the three months through February and the government has broadened its program to stoke lending and kick-start growth.
GfK surveyed 2,001 people from April 5 to April 14.