Consumer confidence “stalled” in February as the UK entered a recession after hard-pressed households continued to cut back on spending amid the cost-of-living crisis.
The overall index score for consumer confidence slipped by two points to -21 in February, the latest GfK Consumer Confidence Barometer shows.
Four indexes measuring consumer confidence were down, while one was unchanged compared with last month.
The major purchase index dropped five points over the last 12 months to -25, while the personal financial situation indicator was down two points to -14 and remains unchanged for the next 12 months.
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The general economic situation sentiment over the last 12 months fell two points to -43, and for the next 12 months was down three points to -24.
GfK client strategy director Joe Staton said: “There’s a mixture of bad news and good news for February. The bad news is that the improvement in the Overall Index Score seen over recent months stalled slightly in February because of a fall across most measures.
“However, the good news is that optimism for our personal financial situation for the next 12 months has not slipped back.
“Although registering again at zero, this is a significant improvement on the -18 score from February last year. This metric is key to understanding the financial mood of the nation because confident householders are more likely to spend, despite the cost of living crisis.”
The Office for National Statistics confirmed the UK entered a recession last week as it reported gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December – the second consecutive quarter of decline.
This week Bank of England governor Andrew Bailey hinted the recession may already be over and there are now “distinct signs of an upturn”.
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