Consumer confidence in the UK remains fragile as December sees a marginal rise.
- The GfK consumer confidence index increased by one point to -17, indicating caution.
- Personal financial optimism has improved, yet concerns about the economy persist.
- Black Friday sales provided a boost, but the overall sentiment is unchanged at -26.
- Impacts from the General Election and recent Budget continue to affect consumer outlook.
In December, the UK’s consumer confidence slightly rose according to GfK’s latest report, increasing by one point to reach -17. Despite this modest improvement, the public’s outlook on the economic situation remains wary. The index reflects cautious consumer attitudes, influenced by a persistent ‘uncharitable view’ on economic prospects. Personal financial situations have experienced a small uplift, with forecasts rising to positive figures, ranging between one and three points higher than the previous year.
The modest rise in consumer confidence, especially regarding personal finances, highlights a shift towards optimism. Over the past year, personal finances improved by two points to stand at -7. Looking ahead to the next 12 months, forecasts predict a slight increase to +1, hinting at cautious optimism despite ongoing economic concerns.
However, the sentiment regarding the general economic situation remains unchanged at a grim -39, suggesting that wider economic issues overshadow personal financial gains. The consumer sentiment index remains at -26, reflecting a consistent lack of confidence among consumers.
The major purchase index, indicating readiness to buy significant items, stayed steady at -16. Conversely, the savings index saw a decline, dropping three points to +21, suggesting consumers might be less inclined to save in light of economic worries. The recent Black Friday provided a temporary uplift for retailers, with sales of technology and durable goods, homeware, and seasonal products increasing by 1.8% in value and 7.7% in volume compared to the previous year. Yet, this positive momentum was not enough to shift overall consumer sentiment.
The UK General Election earlier in the year had been a significant driver of consumer mood changes. Initially fostering optimism, the post-election period experienced a seven-point decline in consumer confidence, exacerbated by governmental economic warnings. These developments, combined with the effects of recent Budget speeches, as highlighted by Chris Wootton, CFO of Frasers Group, have led to a noticeable weakening in consumer sentiment, perceived clearly across high streets.
Overall, UK consumer confidence remains weak amidst economic uncertainty and mixed fiscal impacts.
