Consumer confidence remains “stuck” at -14 points for January as British consumers enter a “wait and see” holding pattern caused by continuing uncertainly over Brexit and the economic and political outlook.
According to Gfk’s consumer confidence index, the general economic outlook dropped to a seven-year low, while UK consumer confidence stands at five points lower than this time last year.
Two out of the five measures decreased in January, two increased and one remained the same. For instance, the index measuring changes in personal finances during the last 12 months increased one point to 0, which is up one point year on year.
Meanwhile the forecast for personal finances over the next 12 months climbed two points to +1, indicating the effect of strong employment, low interest and inflation rates, and rising household incomes.
In regard to the general economic situation consumers, remain weary with the index dropping four points to -35 this month, six points lower than January 2018. Expectations for the general economic situation over the next 12 months have also fallen one point to -39.
Joe Stanton, client strategy director at GfK, links consumers’ sombre mood to Brexit angst and lack of certainty, which is in short supply just two months before the planned date for the UK’s EU exit.
“There’s no shortage of media stories telling you that a no-deal Brexit would cause disruption to our economy. Some pundits go further than ‘disruption’ and talk of ‘chaos’, ‘catastrophe’, ‘disaster’ and even ‘Armageddon’.
“The respondents in our survey are certainly thinking about our economic future and the current verdict is sombre.”
The major purchase index stayed at the same level in January and the savings index decreased two points.
Stanton adds: “True, the Overall Index Score stayed the same this month at -14 and consumers are not capitulating on how they feel about their personal finances, even though the score here is essentially neutral. But there are economic worries going forward. UK consumers can do nothing about this; they have to wait for events to unfold in Westminster and Brussels.”