Consumer confidence in the UK weakened slightly this month amid increasing pessimism around household income and the wider economy, according to a long-running monthly survey.
GfK’s Consumer Confidence Index dropped one point in February to -10, which was in line with expectations and down from -9 in January.
Of the five measures used to determine the overall monthly index, three decreased, one stayed the same level and one increased.
“Ongoing concerns about sluggish household income, rising prices paid by consumers in the shops, and the prospect of inflation-busting council tax and interest rate hikes has dented confidence after last month’s surprising rally,” GfK head of experience innovation Joe Staton said.
“The two-year trend of negative sentiment – the overall index score has bounced between zero and -13 since February 2016 – proves consumers feel pessimistic about the state of household finances and the wider UK economy.
“Shoppers continue to rein in spending, witnessed by the drop in the major purchase index and the gloomy start to 2018 for many retailers.
“Despite positive news about upgraded growth forecasts, and the promise of higher wage increases this year, confidence will remain subdued until we feel the positive impact on our purses.
“Consumers have good reason to feel jittery and depressed.”
However, the forecast for personal finances over the next 12 months decreased one point to +5 this month, although this is two points higher than February last year.
Meanwhile, the measure for the general economic situation of the country during the last 12 months has stayed at -29, eight points lower than February 2017.
Expectations for the general economic situation over the next 12 months decreased two points to -26, six points lower year-on-year.
On the other hand, the major purchase index decreased one point this month to zero, five points lower than February 2017, but the savings index increased two points to +12 in February – and this is 16 points higher than this time last year.