Consumer Confidence High

30th April 2018.

Consumer confidence reached its highest since January 2017 for April according to data to be published today, with economists pointing to rising real wages behind the improvement.

There has been a multitude of disappointing months for retailers, with low turnout on high streets forcing many into CVAs and insolvency. However, with economic pressure easing, and transition agreements with Brussels underway, consumer confidence has the capacity for growth. According to the headline confidence index from YouGov and the Centre for Economics and Business Research (CEBR), confidence reached a level of over 100 percent, indicating overall positive sentiment.

This is not to say the economy is booming, with last week’s forecasts from the Office for National Statistics (ONS) indicating severely weak expansion levels across the UK. The uncertain business climate created after the Brexit referendum is still inspiring hesitancy in business owners. However, business owners should see the confused climate as an excuse to prepare for every scenario; positive or negative.

At the Credit Protection Association, we encourage our members to prepare for every eventuality. Our debt recovery services give our members the extra cash to sustain momentum at the best of times; as well as the cash to pay off creditors at the worst. If the Bank of England does decide to raise interest rates next month, building small monetary savings will cushion the blow.

The mixed picture presented by economic data present a quandary for the Bank of England’s policymakers, who signalled in February that interest rates would likely rise at the next decision from the rate-setting monetary policy committee (MPC) on 10 May.

The confidence data, generally seen as a leading indicator for growth, gave “much-needed hope” of a pick-up in the British economy, according to Nina Skero, CEBR’s head of macroeconomics. Optimism may have been boosted by the long-awaited return to real wage growth, with pay finally overtaking inflation.

“With recent data blurred by extreme weather conditions, the Bank of England is clearly keen to preserve optionality as to the timing of future interest rate hikes, whilst reaffirming their intention to normalise economic policy,” said Bank governor Mark Carney.

The economic picture of the UK is susceptible to change and shift, where positive levels can quickly be erased in favour of downturns. As a result, every business owner should prepare for both. Business owners should focus on expansion and business growth, while also conducting the correct credit checks to ensure long-term success.

At the Credit Protection Association, we not only offer our members our debt recovery services to free up cash flow but also our credit management products to keep it protected. Purging cash flow of late payers and residual debt keeps business in good shape. This allows owners to easily react to any positive shift in consumer behaviour, as well as an economic crisis.