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Entrepreneurs Panel

Richard O'Sullivan
Michael Oliver
Debbie Pierce
Jennie Johnson
Brian Hay
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David Pollock
Laura Tenison
Steve Purdham
Julie Meyer
Tony Caldeira
Charlie Mullins

Consumer confidence shows unexpected rise - but squeeze set to bite

Consumer confidence showed an unexpected uptick in May as shoppers seemed happy to ignore rising inflation and shrinking wages to splash the cash, according to new research.

The UK Consumer Confidence Index rose by two points to minus five last month, with people increasingly positive about their personal financial situation, the wider economy and future plans for major purchases and saving.

However, analyst GfK warned that the real squeeze on living standards may be on the way.

"Despite life becoming more expensive, with inflation hitting its highest level in four years and wages dropping in real terms for the first time in three years, stagnant living standards haven't yet significantly dented consumers' spirits - when it comes to retail therapy, we remain happy to splash the cash as sales jump ahead of expectations," said Joe Staton, head of market dynamics at GfK.

"Although the Overall Index Score is bumping along in negative territory, we haven't seen any significant fall of the kind we might expect during such periods of pre-election and pre-Brexit uncertainty.

"Perhaps the real squeeze on living standards is yet to hit home. After years of people paying off debts post-downturn, unsecured borrowing has steadily increased since 2014, reaching record highs this month. When will we get our comeuppance and realise we have to pay the piper?"

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