UK consumers downbeat but less than expected says GfK
Feb 28, 2019
UK consumer confidence appears to be holding up in the face of the big unknown that is Brexit with GfK saying on Thursday that its long-running Consumer Confidence Index increased by one point month-on-month in February to -13 and up three points year-on-year. Three measures increased and two stayed at the same level in February.
And while consumers still seem to be gloomier about the overall economic situation for the country than for their personal finances, their negative feelings on the economy at least eased a little this month from January, although they still feel worse about the country’s chances than they did a year ago.
Their Personal Financial Situation Over The Last 12 Months view was flat at zero and also flat for the Next 12 Months at +1.
Their General Economic Situation Over The Next 12 Months view rose two points month-on-month to -33, although it was down four points compared to February 2018. And the same measure looking forward was up one point to -38 compared to January, but again it was worse than a year ago, dropping as much as 12 points.
Importantly though, the Major Purchase Index, which shows consumer willingness to splash out on big buys, rose three points month-on-month to +5 and five points year-on-year. GfK also said that consumers are saving more at the moment, which could be a sign that they’re saving for those big purchases or, conversely, that they’re nervous about the economy.
Joe Staton, Client Strategy Director at GfK, underlined the uncertainty and 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.
“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.”
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