Brits’ “wait & see” attitude keeps consumer confidence low

January consumer confidence
// Overall consumer confidence score steady month-on-month at -14
// On a year-on-year basis, consumer confidence has dropped from -9
// Overall score dragged by confidence in the economy, which is at lowest in 7 years

UK consumer confidence remained at its gloomiest in five-and-a-half years this month, as Brits continue their “wait and see” holding pattern ahead of Brexit in March.

The long-running GfK Consumer Confidence Index held at -14 in January, a contrast to the -9 recorded during the same month last year – and the lowest overall consumer confidence score since July 2013.

January consumer confidence

Economists taking part in a Reuters poll had expected a slight fall to -15.

Two of the five measures used to determine the GfK’s overall index saw a decrease in January, while two increased and one stayed at the same level.

The score for consumer sentiment around the general economic situation over the next year dropped one point to -39 in January.

This marked the weakest levels of confidence in the economy since December 2011, and is close to levels seen at height of the global financial crisis the end of 2008 and in early 2009.

Meanwhile, the score for consumer sentiment around personal finances improved by two points and crept back into positive territory with a score of 1, thanks to falling inflation and higher wages and employment.

The major purchases score stayed at the same level in January 2019 at 2, although this is one point lower than January 2018.

January consumer confidence

“With the overall index score stuck at -14 this month, UK consumers remain in a ‘wait and see’ holding pattern in the face of political chaos in Westminster,” GfK client strategy director Joe Staton said.

“We’re feeling slightly more confident about our personal finances, thanks to the effect of strong employment, low interest and inflation rates, and rising household incomes.

“However, concerns about the wider economic prospects for the country continue to weigh and depress the overall index score.

He added: “This is unsurprising given that consumers, companies and corporations thrive on certainty, which is in short supply just two months before the planned date for the UK’s EU-exit.

“The next few months promise to be turbulent for the consumer so will this measure for the economic outlook in the coming year drop even further?”

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