No end in sight for UK consumer confidence slump as measure falls again

UK consumer confidence fell again in December and is fast approaching two years of decline, according to GfK’s consumer confidence index. Of the five measures analysed for the score, just one saw an increase.

The overall consumer confidence score dropped by one point to -13 in December, marking a full year of negative scores. “It has been a slipping and sliding year. The Overall Index Score has slipped from - 7 in January to -13 in December – and not a single positive score in between. In fact, we have not been in positive territory for nearly two years,” said Joe Staton, head of market dynamics at Gfk.

While the index measuring changes in personal finances during the last 12 month fell by two points to -3, the forecast over the next 12 months remained at the same level at +2.

The measure for the general economic situation of the country during the last 12 months was the only category showing an increase, rising by one point to -31. But consumers are still cautious about the future, with expectations for the country’s economic situation over the next 12 months remaining flat at -28.

The major purchase index fell by one point to -4 in December. This is 16 points lower than last year, as more consumers started thinking about saving as demonstrated by the savings index, which is now nine points higher than in December 2016.

UK consumer confidence is expected to continue falling in the new year, according to Staton from GfK. “We need to see several issues move on before the downward trend of the consumer mood changes. We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise. But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”

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