GfK points to maintained strength in household consumption in Q2

The outlook for personal finances, however, edged down for the first time since November 2013, printing 3 in June, versus 6 in May, likely related to the muted wage growth we’ve seen so far.

Despite the relative pessimism on future finances, all in all, today’s positive outcome echoes improvements in the economic outlook and suggests solid consumption growth in Q2.

In our view, consumption spending is being supported by strong job creation, wealth effects from the recovery in the property markets and muted inflation pressures. We forecast household consumption to have grown 0.7% q/q in Q2 and expect it to rise by 2.5% and 2.3% in 2014 and 2015, respectively.

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