December’s consumer confidence in the UK continues to remain at historically low levels, according to the latest index figures released by GfK. Although there was a slight increase in the November and December readings, the overall index remained at a chilly -42. While three of the broader measures showed improvement compared to November, one was down, and one remained unchanged.
The index measuring changes in personal finances over the past 12 months fell by four points to -28, indicating a significant decline of 23 points compared to December last year. The forecast for personal finances over the next 12 months remained at -29, which is a staggering 30 points lower than the same period in the previous year.
Regarding the general economic situation in the UK, the index measuring the last 12 months increased by one point to -66, but still remains 27 points lower than December 2021. However, expectations for the general economic situation over the next 12 months improved by five points to -53. Despite this improvement, the index remains 29 points lower than December last year.
The Major Purchase Index, which indicates consumer intent to make significant purchases, increased by four points to -34, but still lags behind last year by 28 points. On the other hand, the Savings Index dipped by one point to +20, but remains six points higher compared to this time last year.
Joe Staton, Client Strategy Director at GfK, expressed concern about the persistently low consumer confidence, stating, “December marks the eighth consecutive month in which the Index has remained at -40 or worse, the first time this has happened in nearly 50 years of record-keeping. This is a warning sign of a challenging road ahead and suggests that the UK is not yet out of the economic recession. Concerns about our economic future persist, and with the holiday season approaching, it is unlikely that we will see a significant rebound in confidence any time soon.”
The data indicates that UK consumer confidence continues to stagnate, with an overall sentiment remaining pessimistic and no immediate signs of improvement. This has significant implications for the economy as consumer spending plays a crucial role in driving growth. The ongoing uncertainty surrounding personal finances and the broader economic outlook is likely to dampen consumer sentiment, creating a challenging environment for businesses across various sectors.
The prolonged period of low consumer confidence underscores the need for government intervention and supportive fiscal policies to stimulate economic recovery. Without measures to boost consumer spending and restore confidence, the UK economy may face prolonged stagnation and struggle to regain its pre-pandemic strength.
As the festive season approaches, it is clear that the UK is facing an uphill battle to revive consumer confidence. While hope remains for the future, it is evident that immediate action is needed to address consumer concerns and provide a much-needed boost to the economy. Only then can the UK hope to emerge from the recessionary woods and build a sustainable path towards economic recovery.
Useful links:
– GfK UK Insights
– Bank of England
