Consumer confidence shows slight improvement this month
UK consumer confidence has improved slightly this month but still remains below the levels seen before the EU referendum.
GfK’s long-running Consumer Confidence Index has increased by one point to -7.
Joe Staton, head of market dynamics at GfK, said: “The past 12 months were a really turbulent year for confidence in the UK as consumers reacted to the dramatic economic and political turmoil of 2016. After a positive start to the year, the index plunged rapidly in post-Brexit Britain with the recovery to September then evaporating by year end to limp home at -7 for December.”
The index relating to the forecast for personal finances over the next 12 months increased by one point to +3 while the index measuring expectations for the general economic situation over the next 12 months decreased by one point to -23; this is 17 points lower than December 2015.
Meanwhile, the major purchase index increased by seven points this month to +12; this is five points higher than this time last year.
Staton continued: “While consumers remain relatively confident about their personal financial situation, confidence in the general economic situation for the UK has collapsed in the face of uncertainty about the future both at home and abroad. Despite everything, consumer resilience is shown by strength in the major purchase index, the ‘now is a good time to buy’ mantra being reflected in strong retail sales growth.”
Looking ahead to 2017, he added: “Against a backdrop of Brexit negotiations, the decline in the value of sterling, and the prospect of higher inflation impacting purchasing power, we forecast that confidence will be tested by the storm and stress (Sturm und Drang) of the year to come.”
