UK consumer confidence rises but forecasts remain bleak 
Consumer confidence in the UK improved by two points this month but still remains near all-time low levels as record-high inflation eats away at wages and the cost of living crisis dampens people’s outlook.
On Friday, Growth for Knowledge’s (GfK) monthly consumer index, which measures changes in personal finance for UK citizens, rose in December to -42 from a score of -44 recorded in November.
Numbers in December mark a third consecutive monthly improvement in consumer confidence however, the index has trailed around the -40 mark or worse for the past eight months.
Joe Staton, client strategy director at GfK said that the consecutive eight months at the -40 mark was a first for the index, which started measuring consumer confidence in the UK back in 1974.
” As we enter the festive season, the Overall Index Score is still depressed and, with scant seasonal joy at present no immediate prospect of good news, it is unlikely we will see a rebound in confidence anytime soon”, Staton said.
Other takeaways from GfK’s long-running consumer confidence report include a four-point drop from -24 in November to -28 in December for consumers’ perceived personal financial situation over the past 12 months. The current reading is 23 points worse than in December 2021.
Citizens have come to terms with the highest level of inflation since 1981, with the most recent readings from the Bank of International Settlements at 11.1 per cent.
The high inflation numbers have prompted six consecutive interest rate hikes by the Bank of England in the past 12 months, hurting business lending throughout the country.
Despite Bank of England Governor Andrew Bailey insisting that he saw “good news” in the UK’s inflation numbers, a recession seems imminent, with banks forecasting a year-long economic drought that could see the country shed three per cent of its GDP.
It is no wonder that consumer expectations regarding personal finances in the next 12 months look grey to the public. GfK figures captured the doom and gloom as the future outlook remained at -29 points, unchanged from last month’s expectations which were 30 points lower than the same time a year ago.
” As we enter the festive season, the Overall Index Score is still depressed and, with scant seasonal joy at present no immediate prospect of good news, it is unlikely we will see a rebound in confidence anytime soon”, Staton said.