UK consumer confidence suffers from the January blues, outlook dips

By

Nigel TAYLOR

Published
Jan 22, 2021

‘Vaccination no shot in the arm for UK consumer confidence’ is Friday’s telling headline from GfK’s economic reading for January that reflects a less optimistic view from a population stuck in a winter lockdown.

The long-running Consumer Confidence Index fell two points to -28 in January while four of the index’s five measures were also down on December’s reading that had offered a glimmer of hope for a more positive outlook.

“Despite the widespread anticipation of a ‘return to normal’ with the ramp-up of the vaccination programme, it is too early to deliver a [shot] in the arm to UK consumer confidence”, Joe Staton, GfK’s Client Strategy director, said.

And with it, the body's General Economic Situation for the last 12 months “still makes for grim reading”, down two points at -67, and 39 points lower than in January 2020.

Importantly, expectations for the coming year show a massive nine-point drop, 20 points lower than last January, as pessimism over jobs and reduced spending power continues to be a major concern.

Regarding personal finances over the last 12 months, the reading inched up one point to -8, but that's still nine points lower than 12 months ago. The reading for the next 12 months is down one point this month at +2, four points lower than a year ago.

Meanwhile, The Major Purchase Index also fell two points to -24 and is a hefty 25 points lower than it was in January 2020. Finally, the Savings Index inched up one point to +18 in January, two points lower than this time last year. But it suggests that consumers are hoarding cash and could be ready to spend it once restrictions are lifted and some certainty returns.