(Bloomberg) -- UK consumer confidence improved for a second consecutive month, thanks to a rosier economic outlook and a boost to household budgets after inflation hit a near three-year low.

GfK said its sentiment tracker climbed two percentage points to minus 17 in May. That’s stronger than the minus 18 expected by economists and well above levels a year earlier when the cost-living-crisis was still biting hard.

The figures will be welcomed by Prime Minister Rishi Sunak, who this week called a general election for July 4 in the face of polls suggesting his Conservatives are heading for defeat after 14 years in power. Sunak is gambling on signs that the economy has turned a corner, with the recession over, inflation approaching the 2% target and wages rising in real-terms again.  

“With the latest drop in headline inflation and the prospect of interest-rate cuts in due course, the trend is certainly positive after a long period of stasis which has seen the Overall Index Score stuck in the doldrums,” said Joe Staton, client strategy director at GfK. “All in all, consumers are clearly sensing that conditions are improving. This good result anticipates further growth in confidence in the months to come.”

GfK’s measures of personal financial prospects, savings and the general economic outlook all posted gains. However, an index tracking the willingness of households to splash out on big-ticket items declined one point to minus 26, “reinforcing the fact that the cost-of-living crisis is still a day-to-day reality for all of us,” Staton said. 

Even though inflation is easing, prices are still 23% higher than before the pandemic and GDP per capita is below last year’s levels.

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