Consumer confidence shows no sign of a ‘dramatic drop’

Although the overall index score is still negative, three measures increased and two remained the same in the monthly tracker, suggesting UK consumers remain stoic despite uncertainty around the outcome and impact of Brexit.

Consumers’ view of changes to their own personal financial situations, both reflecting on the past 12 months and looking at the year ahead, remained the same as in January ( 0 and +1 respectively).

Joe Staton, client strategy director at GfK, said: “Despite a slowdown in overall growth and concerns about the impact of Brexit uncertainty on the UK economy, topline consumer confidence is stable again this month. Although bumping along in negative territory, the Overall Index Score is not showing any sign of making the dramatic drop seen after the June 2016 Brexit referendum or in the early days of the last financial downturn.”

The index measuring the country’s general economic situation during the last year rose two points to -33, which is four points lower than this time last year.

While expectations for the economy in the year ahead increased by one point to -38, this is still 12 points lower than it was in February 2018.

Staton said: “The continuing depressed sentiment towards the general economic situation might point towards the calm before the storm of post-Brexit headwinds and potential negative economic outcomes.”

Meanwhile, the major purchase index, which asks participants if they think now is a good time to be spending money on big ticket items, rose by three points to +5 – five points higher than 12 months ago.

The savings index, which assesses people’s attitudes to saving but is not included in the overall index score, increased four points in the past month to +18, six points higher than February 2018.

Staton added: “Consumers respond to certainty and that’s in short supply. It is worth bearing in mind that many economic indicators (employment levels, wage growth) remain positive. But it is frankly amazing that confidence is so stoic and stable in a world of sharp political instability and fear of the unknown.”

The monthly Consumer Confidence Barometer of 2,000 individuals is conducted by GfK on behalf of the European Commission. Interviews were carried out during 1st – 14th February 2019.