(Alliance News) - UK consumer confidence rebounded in March, backed largely by increased sentiment among younger shoppers, a survey showed on Thursday.
According to a British Retailer Consortium-Opinium survey conducted from March 4 to 7, three-month consumer expectations on the state of the economy improved slightly to minus 35 points in March from minus 37 in February.
The survey's personal financial situation gauge also firmed, to minus 10 points in March from minus 11 in February.
BRC Chief Executive Officer Helen Dickinson commented: "Consumer confidence stabilised this month after February's record low. This was coupled with an increase in spending expectations for the three months ahead, both for retail spending and spending more generally. Within retail, spending expectations for DIY and home improvements moved into positive territory for the first time."
Consumers aged 18 to 27 expected to spend more than the previous three months in every category, Dickinson said, while consumers 44 to 59 planned the biggest cuts to spending for most items, excluding food.
Food and grocery spending expectations hit a new high, continuing to outperform, "though this could also be due to the expectation of rising prices," Dickinson noted.
Three-month expectations for personal spending on retail rose to 0 in March, up from minus 5 points in February; personal spending overall rose to 11 in March, up from 4 in February; personal saving fell to minus 5 in March, down from minus 3 in February.
The boost may be short lived, however, with economic reforms set to pushed up prices, Dickinson said.
"The Spring statement is an opportunity for government to inject some confidence back into the economy. In a matter of weeks, retailers grapple with the reality of billions in extra costs from the increases to employer National Insurance and the National Living Wage. This GBP5 billion in new costs will give many no option but to push prices up.
"Food inflation is likely to hit 5% by the end of the year, and with further costs from the new packaging tax and implementation of the Employment Rights Bill, prices risk being pushed up further. Without a much needed confidence boost from government, the scale of new costs will see retail investment fall further, holding back future growth in the economy."
UK Chancellor Rachel Reeves delivers the government's spring statement on Wednesday next week. Together with the autumn statement, it one of two major financial statements for the new fiscal year that starts in April.
By Aidan Lane, Alliance News reporter
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