Tuesday, August 9, 2022

Consumer confidence grows in January

Consumer confidence in the UK‘s general economic situation has improved in January, up three points on this time last year to -26, new figures released today reveal.

According to the GfK/NOP Consumer Confidence Index, consumer appetite for making major purchases also grew over January, as the index showed a four point improvement to -22, its second highest level in over two years.

Such positive results are in line with the CBI‘s findings earlier this month that UK retail sales beat expectations, noted analyst firm Capital Economics though it warned that last week‘s disappointing GDP numbers left sentiment fragile.

Capital Economics‘ UK Economist Martin Beck said: “Talk of a “triple-dip” recession following last week‘s disappointing GDP numbers means sentiment could start to approach the lows seen in recent years.

“Just as confidence appeared to react positively to news in October last year that the economy had grown in the third quarter, it may fall back following Q4‘s bad news.

“And, given the poor starting point, if fears of a “triple-dip” materialise, it would not be surprising if confidence approached the depths reached in the 2008/09 recession.”

GfK/NOP‘s index also revealed that consumer confidence in personal finances has taken a hit post-Christmas with the index measuring changes in personal finances during the last 12 months decreasing two points on the same period last year.

The forecast for the coming 12 months has remained the same this month at -7, two points higher than this time last year though Nick Moon, Managing Director of Social Research at GfK, said that despite “a definite note of optimism”, the figures may be cause for concern.

Moon commented: “It‘s worth noting that people‘s views of their own financial situation aren‘t as optimistic… and this suggests it is too soon to say if more positive views on the general economy mark the start of sustained rise in the Index.

“Indeed, the continuing gloom from the high street and the talk of triple-dip recession makes that seem somewhat unlikely, but a rise in two months out of the last three is an encouraging sign.”


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