UK consumer confidence rises in January but is still low says GfK

By

Sandra Halliday

Published
Jan 31, 2018

We’ve been seeing a lot of UK consumer confidence reports in recent days and they all add up to thing - shoppers aren’t feeling that great about spending.

Even when confidence is up compared to last month, consumer sentiment is staying stubbornly in negative territory and that doesn’t bode well for fashion retailers in the season ahead.

So what happened in January? The monthly GfK report showed confidence is still low with no expectation of an upturn this year. But there are signs that while low, confidence is rising… at least a little.

GfK’s Consumer Confidence Index increased by four points in January with all five measures rising. Before we get carried away though, that resulted in a reading of -9, not exactly worth breaking out the bunting for. And that reading is lower than the -5 of a year ago.

The Personal Financial Situation over the last 12 months index rose 2 points compared to December but only reached -1 and is down from the +3 of a year ago.

The Personal Financial Situation over the next 12 months index rose four points to +6 from December’s +2, but is lower than January 2017’s +7.

The General Economic Situation over the last 12 months index sits at -29, up two points but still lower than the year-ago -24.

The same index looking at the next 12 months is up four points at -24 but, again, is lower than the -23 of January 2017.

And the Major Purchase Index? That’s up five points at +1, which is much better than December’s -4, but still down on January 2017’s +10. And of course, if consumers are going o make major purchases, that could mean they rein in their spending on minor fashion buys.

Joe Staton, Head of Market Dynamics at GfK, said: “Having survived Christmas, New Year, the January Sales and Blue Monday, bullish Brits report a more upbeat view of their financial prospects for 2018 this month. From expectations for their personal financial situation to the outlook for the UK economy and major purchase index, we are reporting a rebound in levels of optimism across the board after two years of the Overall Index Score sitting at zero or in negative territory.”

But the fact that confidence can’t quite tip into the plus column overall is still a worry with Staton saying the absence of good news on wages and inflation means that the January increase “could be a temporary blip rather than a strong sign of recovery.” He added: “With 2018 still in it’s infancy, and with a great deal of uncertainty in store, there could be more turbulence in the consumer mood this year and next. Watch this space.”