The recent dip in UK consumer confidence due to the January blues and ongoing winter lockdown has cast a shadow of uncertainty over the population. According to GfK’s economic reading for January, the long-standing Consumer Confidence Index has dropped by two points to -28, signaling a less optimistic outlook compared to the slight improvement seen in December.
Joe Staton, GfK’s Client Strategy director, highlighted the lack of a significant boost in consumer confidence despite the rollout of the vaccination programme and hopes for a return to normalcy. The General Economic Situation for the past year paints a grim picture, with a decrease of two points to -67, showing a 39-point decline compared to the same period last year. Expectations for the upcoming year have also plummeted by nine points, landing 20 points below January 2020 levels, driven by concerns about job security and reduced spending power.
Personal finances mirror the downward trend, with the reading for the last 12 months ticking up by just one point to -8, which is still nine points lower than the previous year. Looking ahead to the next year, the reading is down by one point to +2, reflecting a decrease of four points from the previous year. The Major Purchase Index has seen a substantial drop of two points to -24, a significant 25-point decline from January 2020. On a slightly brighter note, the Savings Index has increased by one point to +18 in January, suggesting that consumers are saving cash in anticipation of better times ahead.
In light of these figures, it is evident that caution and uncertainty prevail among UK consumers, despite the progress made with the vaccination programme. The road to economic recovery and rebuilding consumer confidence appears to be longer and more challenging than initially thought, especially with ongoing lockdown measures continuing to impact consumer sentiment.
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