UK consumers’ confidence over their spending power dropped in April, despite the emergence of more positive economic data, according to a new report.
The latest Lloyds Bank Spending Power Report shows that the overall confidence of people surveyed took a step backwards last month, after recording an upward trend throughout the rest of 2015. This resulted in the Overall Index dropping back three points to 155. According to Lloyds, uncertainty in the run up to the General Election may have restrained confidence.
Patrick Foley, the chief economist at Lloyds Bank, said: “Households retain a positive view of their financial situation, as a pick-up in wage growth and muted inflationary pressures combine to strengthen real incomes. A more cautious assessment of future prospects continues to prevail, however. But against a backdrop of improving labour market conditions, and the lifting of some near term uncertainty following the election, a solid pace of growth seems likely to unfold this year.”
April saw Lloyds Bank’s Future Situation Index drop for the first time this year, taking it to 108, with the uncertainty in the run up to the General Election possibly dampening the outlook. Anticipated future spending remains stable, with around two thirds (65 per cent) stating they do not expect their spending habits to be different in six month’s time.
Claire Garrod, head of personal current accounts at Lloyds Bank, said: “Spending power paused for breath in April with the political uncertainty in the UK seeming to impact financial confidence, which dropped back compared to March. However, despite this backwards step, confidence remains at a very high level and has been on an upward trend in 2015. Attention has now turned to summer spending and the best ways to finance summer holidays, with many people already shopping around online for the best deals and saving up to meet the costs, which are now £1,345 on average.”