Consumer confidence in December has fallen to the lowest level for 2017, capping what has been a “slipping and sliding year” dominated by Brexit uncertainty and inflation.
According to the long-running GfK Consumer Confidence Index, overall UK consumer confidence dropped by one point to a score of -13 this month – a significant year-on-year drop from the -7 recorded in December 2016.
Not only is it the the third consecutive month that consumer confidence has fallen, it also comes at a crucial time for retailers hoping to benefit from the peak Christmas shopping season.
In addition, apart from marginal improvements in the index recorded in May, August and September, December’s consumer confidence marked a year without any significant uplift into positive figures.
GfK head of market dynamics Joe Staton said that UK consumer confidence actually hasn’t been in positive territory for almost two years.
“It has been a slipping and sliding year,” he said.
“The overall index score has slipped from – 7 in January to -13 in December – and not a single positive score in between.”
He added: “We need to see several issues move on before the downward trend of the consumer mood changes.
“We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise.
“But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”
The major purchase index, which indicates confidence in spending on big-ticket items, has also slipped from positive 10 in January to -4 this month.
Meanwhile, it has been the reverse for the savings indicator, which sat at -5 last December but has seen positive scores from April onwards, indicating that consumers were becoming more cautious.
The personal financial situation measure during the last year has also decreased two points this month to -3, three points lower than this time last year, while the forecast for the next 12 months has remained at 2, one point lower than last December.
The measure for the general economic situation of the country during the last 12 months has increased one point to -31 but remains five points lower than last December.
Expectations for the next 12 months have stayed at -28, five points lower than this time last year.