Consumer confidence is still “in the doldrums” according to GfK, which doesn’t expect the UK economy to catch alight any time soon.
In September, the overall consumer confidence index rose by just one point to -9 – this is eight points lower than the same period a year ago. Consumer perceptions of their personal finances over the last 12 months experienced the biggest fall, down three points to -1. And expectations for personal finances over the next 12 months also fell in September – dropping 1 point to a score of 4.
It was better news for the major purchase index, which rose one point to a score of 1. However, it is worth nothing this is still some way off its score of 9 in September 2016, with Brits clearly now a lot less inclined to spend out on big ticket items such as electricals.
There was at least some room for cheer in this month’s index, with the measure around the public’s perception of the general economic situation over the last 12 months (-28) and over the next 12 months (-24) both up by two and three points respectively. Yet GfK’s head of market dynamics Joe Staton says we shouldn’t be fooled by these numbers.
He tells Marketing Week: “Confidence is in the doldrums. Don’t be fooled by this month’s uptick for the general economy – there have been no positive values whatsoever for the wider economy since August 2015, more than two years ago.
“It’s difficult to see anything on the horizon that will put a rocket under consumer confidence and send it flying skywards. And there’s every likelihood it will quietly slip lower.”
Surely there are some greenshoots? After all, retail sales in the UK are growing at their highest rate in two years. According to Staton, this growth is being driven by higher lending.
He concludes: “Many commentators expected shoppers to cut back on spending thanks to the lower purchasing power that arises from higher inflation and weak wage growth. But consumers are still spending out there, and have repeatedly defied predictions of a downturn since last year’s Brexit vote, partly by running down savings and/or borrowing more.
“Indeed, the major purchase indicator has crept up a second month in a row and the savings index has sagged. It’s live now, pay later.”