To ask His Majesty's Government what assessment they have made of reports of increasing consumer confidence and economic recovery in the coming months, as indicated by (1) the S&P Global/Cips Flash UK PMI composite output index, and (2) GfK’s Consumer Confidence Index, both published on 15 December; and what steps they are taking to support this.
Answered on
21 December 2023
Consumer confidence, as measured by GfK, reached a 3-month high in December, and its second-highest level since January 2022. The flash composite PMI for December rose to a six-month high.
To sustain consumer and business confidence, consumers and businesses need to feel assured that their government is taking the long-term decisions necessary to strengthen the economy, promote macroeconomic stability, and build a brighter future.
In January 2023 the Prime Minister set out three economic priorities: to halve inflation, grow the economy and reduce debt. Progress is being made against all three of these.
Consumers are directly benefitting from the responsible approach taken to prioritise economic stability and make work pay. The cut in National Insurance contributions means the average worker on £35,400 will receive a tax cut in 2024-25 of over £450. From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44, representing an increase of over £1,800 to the annual earnings of a full-time worker on the NLW.
The Autumn Statement included an ambitious package of measures to unlock business investment. Permanent full expensing, worth over £10 billion a year, is the biggest business tax cut in modern British history. The OBR expect it to unlock an additional £14 billion of investment over the forecast period. Together with submitted plans for investment in regulated utilities, the Autumn Statement measures could raise business investment by around £20 billion per year in a decade’s time.