NEWS16 January 2023

Consumer confidence up in December

Cost of Living News Trends UK

UK – Consumer confidence in the UK rose slightly in December driven by significant improvements in outlook for household finances, according to analysis from YouGov and the Centre for Economics and Business Research (Cebr).

Consumer confidence spending pound_crop

In its December survey, which is based on around 6,000 interviews conducted every month, YouGov and Cebr said there was a one-point increase in consumer confidence to 95.9, albeit down from the 110 points seen a year ago.

The increase in consumer confidence was due to a 3.3-point rise in views on household finances over the past 30 days to a total score of 62.3, as well as a 8.8-point surge in anticipated household finances for the year ahead to an overall 56.9 points.

Positive scores on the consumer confidence index are more than 100, with scores below 100 deemed to be in negative territory.

Homeowners were more optimistic about the value of their properties over the next 12 months, rising 1.2 points to 105.1, but there was a 6.4-point drop in retrospective measures of house value for the past month, down to 106.7.

Job security over the past 30 days was rated at 91.9, down 0.7 points, while outlook for the year ahead was 0.3 points lower at 118.2.

Business activity was rated at 108.8 points for the past month, up 1.9 points, while measures for the year ahead saw a slight increase from 116.8 to 117.2.

Kay Neufeld, director and head of forecasting and thought leadership at Cebr, said: “Consumers felt slightly less pessimistic at the end of last year as inflation started to fall back from its recent historic highs.

“While we expect inflation to continue to subside throughout 2023, consumers will still feel the pinch from higher food prices and those exposed to higher mortgage rates will see their monthly costs go up significantly.”

Emma McInnes, global head of financial services at YouGov, said: “Increased optimism around household finance measures is reflected in our latest consumer confidence figures, as we see a slight rise in short-term and forward-looking measures on household finance.

“While the overall Index still paints a bleak picture for consumer confidence, we see a continuation from our November figures of increased confidence in household finances, suggesting this appears to be moving in a more positive direction.”