UK consumer confidence dips ahead of Christmas says GfK

By

Sandra Halliday

Published
Oct 31, 2018

UK consumer confidence has dropped again with a one point fall in the Consumer Confidence Index to -10, a sign of the increasingly chilly economic environment that’s helping to keep fashion sales muted at present.

“The recent claims about the imminent end of austerity, and the good news of lower retail price inflation and accelerating wages growth would normally be sufficient to boost consumer sentiment. But the core Index slipped again this month,” said Joe Staton, Client Strategy Director at GfK, which compiles the Index. 

“The prospect of a no-deal/hard-deal Brexit must surely be weighing heavily on people’s minds, injecting a mood of despondency as to how people view their future personal finances and the longer-term economic outlook for the UK,” he added.

So what do the figures actually say? Well, the overall index score is at the same level as a year ago but is worse than both September and August this year. People seem to feel OK about their personal financial situation though because, looking at the last 12 months, that measure was at +1 (better than the zero of a year ago). 

But they’re becoming slightly less upbeat about their personal expectations for the next 12 months, although this is still in positive territory. That measure went down one point to +4.

As far as their general view of the economy over the last year is concerned, they remain pessimistic with a reading of -28 and that reading’s the same for the 12 month ahead too.

The major purchase index also dropped two points to +4, which isn’t what retailers want to hear as we head towards Christmas.

Staton added that consumers “appear to be losing confidence that now is ‘the right time’ to make major purchases. This will concern retailers in the run-up to Black Friday, Cyber Monday and the key Christmas trading period. 

“Consumers behave like financial markets – when confidence is lacking, markets stutter and tumble. When confidence comes back, we are more than willing to spend, borrow or save. However, with no immediate prospect of any feel-good news impacting our hearts, minds and wallets, the Index is set for further declines. It looks like the UK Government will need to administer an exceptionally strong tonic to the nation to settle the obvious Brexit anxieties.”