UK consumer morale stays low as Brexit nears

By

Sandra Halliday

Published
Jan 31, 2019

Some aspects of UK consumer sentiment have stayed stubbornly low during January as the Brexit negotiations turn into a farce, with the latest GfK Consumer Confidence Index down at -14, much worse than the not-brilliant -9 of a year ago.

But the latest report also showed consumers having mixed emotions with a combination of both cautious optimism and downright pessimism.  

The -14 reading was actually the same as December and was one point lower than November, showing that the weak sentiment that made the UK Christmas shopping season such a washout hasn’t improved. 

Joe Staton, Client Strategy Director at GfK, said of this: “With the Overall Index Score stuck at -14 this month, UK consumers remain in a ‘wait and see’ holding pattern in the face of political chaos in Westminster.  Although we’re feeling slightly more confident about our personal finances – thanks to the effect of strong employment, low interest and inflation rates, and rising household incomes – concerns about the wider economic prospects for the country continue to weigh and depress the Overall Index Score.”

While consumers have stayed generally gloomy, they still seem to feel slightly more optimistic about their own personal finances than for those of the country as whole. The reading for ‘personal financial situation over the last 12 months’ was up one point to zero both year-on-year and month-on-month. And the same measure looking ahead to the next 12 months was up two points to +1 month-on-month, although it was down compared to the +6 of January 2018.

And the major purchase index didn’t look as bad as might have been expected either given that it was at +2, the same as December and up one point from a year ago.

However, the view of the ‘general economic situation over the last 12 months’ was down four points month-on-month to -35 and down six points compared to January 2019. And the view for the 12 months ahead was even worse with a reading of -39, down one point compared to December and a whole 15 points lower than a year ago.