Despite the surging cost of living, British consumers have become increasingly optimistic this month, according to market research firm GfK. The company's Consumer Confidence Index rose

for the third consecutive month to reach -30 in April, up by six points from March and the highest reading since February last year, just before Russia's invasion of Ukraine caused a surge in energy costs across Europe.

The reading was also above the -35 forecast in a Reuters poll of economists. Consumers' expectations for the UK economy over the next 12 months hit a 15-month high, and they viewed the prospects for their personal finances as the brightest since February 2022.

While double-digit inflation remains a challenge, the country's economy is expected to avoid a recession this year. Nonetheless, GfK's client strategy director, Joe Staton, noted a "sudden flowering of optimism" among households, saying that the brighter outlook for the economy could even be seen as the proverbial 'green shoots of recovery'.

Although official data released earlier this week showed that consumer price inflation fell less than expected in March to 10.1%, the cost of food and drinks surged by the most since August 1977. As a result, investors are betting that the Bank of England will raise interest rates for the 12th time in a row at its next meeting in May, aiming to bring double-digit inflation back to its 2% target.

GfK's sub-index of shoppers' willingness to make expensive purchases also increased, while the gauge of savings intentions fell slightly but remained positive, nine points higher than the same month last year. The survey of 2,000 people was conducted between April 3 and April 13. Photo by Big Red London Apartments, Wikimedia commons.