Consumer confidence is inching up, with optimism slowly returning despite concerns over the cost of living, interest rates and the general economy raging on.
All five measures that make up GfK’s monthly Consumer Confidence Barometer increased in January, with the overall index score increasing by three points. While still in negative territory at -19, it is the highest score since January 2022.
Notably, people’s view of their personal finances over the coming year came out of minus figures for the first time in 24 consecutive months, increasing two points to zero.
Joe Staton, client strategy director at GfK, describes the change as “significant” adding it is the “best single indicator for how the nation’s households feel about their income and expenditure”.
“UK consumers are hungry for good news but it’s in short supply. So the burst of New Year’s optimism in this month’s headline score – up a further three points to -19, and the third monthly increase in a row – is a surprise,” Staton tells Marketing Week.
Consumers are also viewing their personal finances (up two points to -12) and the general economy (up three points to -41) over the past year more favourably.
People’s expectations for the general economic situation over the next 12 months have also improved, up four points to -21, while the major purchase index saw a three-point boost to -20.
“Despite the cost of living crisis still impacting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation. On balance, while there is national and global turmoil, the Consumer Confidence Index has started 2024 on a positive note,” says Staton.
He adds: “Marketers have all the skills required to navigate uncertainty and those skills will come into play for sure as they work their away further into 2024.”