GfK: Consumer Confidence Index Rises by One Point in February

GfK's monthly UK Consumer Confidence Index has risen one point in February to reach -13, despite Brexit concerns.

Joe Staton, Client Strategy Director at GfK, says:

“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.

"While the view on personal finances looking at the year to come is still marginally positive, 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.

"Are we on the edge of some kind of economic or livelihood precipice? Consumers are like markets, they respond to certainty and that’s in short supply just now. 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.”

UK Consumer Confidence Measures – February 2019

The Overall Index Score in February 2019 is -13; three measures increased and two stayed at the same level. 

Personal Financial Situation

The index measuring changes in personal finances during the last 12 months has stayed the same this month at 0; this is also the same as this time last year.

The forecast for personal finances over the next 12 months has stayed the same at +1 this month; this is four points lower than February 2018.

General Economic Situation

The measure for the general economic situation of the country during the last 12 months has increased two points to -33 this month; this is four points lower than February 2018. 

Expectations for the general economic situation over the next 12 months have increased one point to -38; this is 12 points lower than February 2018.  

Major Purchase Index

The major purchase index increased three points in February 2019 to +5; this is five points higher than February 2018.    

Savings Index

The savings index has increased four points in February to +18; this is six points higher than at this time last year.

Business growth expert and Yomdel CEO, Andy Soloman, commented:

“Ironically the situation we find ourselves facing has grown more uncertain, yet consumer confidence has edged a tad higher and that pretty much sums up Brexit on a basic level whereby nothing makes any rational sense.

Consumer confidence remains in negative territory dampened by the lack of guidance shown by our Government and it’s hard to expect the UK consumer to settle down and go about their business when those in charge of the country are offering up such an abysmal example of leadership.

The fear of the unknown continues to cause strong market turbulence despite the fact that wage growth is healthy, unemployment is falling and the property market, while fairly static, remains strong. Right now we’re not sure whether we should carry on as normal or run for the hills and stock pile goods in anticipation of a no deal Brexit and an economic collapse. This indecision has been particularly detrimental to the UK retail sector as bricks and mortar outlets continue to struggle with high business rates and rents and competition from the online sector.

At least in the face of uncertainty consumers are managing to squirrel away some savings, but much like the Millennium Bug, we expect that once the world doesn't upon Britain’s departure from the EU, UK consumers will emerge from their boltholes and confidence will once again lift.”  

Source : Insight DIY Team and GfK

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