Consumer confidence remains shaky
January 25, 2021
The vaccine roll out is "not yet a jolt in the arm for UK consumer confidence" say analysts at GfK but a positive view of household finances for 2021 is holding up they say.
The UK Consumer Confidence Barometer from GfK decreased two points to minus 28 in January. The Major Purchase Index within the research also slipped two points.
The figures for the Major Purchase Index are especially disappointing as this data showed a four point improvement in December, against the general trend of consumer confidence. GfK's research question regarding "major purchases" specifically references home furnishing.*
But the survey also revealed "positive news" says GfK when it asked consumers about their attitude to their own household finances . Sentiment remains optimistic, although it too decreased slightly in January.
Joe Staton, GfK’s Client Strategy Director, says: “Despite the widespread anticipation of a ‘return to normal’ with the ramp-up of the vaccination programme, it is too early to deliver a jolt in the arm to UK consumer confidence.
"Our view of the general economic situation still makes for grim reading, especially expectations for the coming year, which shows a nine-point drop. This continues to suppress the overall index, which is further dampened by a weak major purchase score, as reflected in retail sales figures across the country.
"However, the key is how we all view our personal financial situation for the next 12 months. Confidence in this figure reflects our financial hopes and fears, as well as those of our families and loved ones, and it seems to be holding up. This is positive news because, amid widespread uncertainty over jobs and livelihoods, any decline in how we see our personal finances in the year to come would be a clear warning for the economic outlook.”
"Our view of the general economic situation still makes for grim reading, especially expectations for the coming year, which shows a nine-point drop. This continues to suppress the overall index, which is further dampened by a weak major purchase score, as reflected in retail sales figures across the country.
"However, the key is how we all view our personal financial situation for the next 12 months. Confidence in this figure reflects our financial hopes and fears, as well as those of our families and loved ones, and it seems to be holding up. This is positive news because, amid widespread uncertainty over jobs and livelihoods, any decline in how we see our personal finances in the year to come would be a clear warning for the economic outlook.”
* GfK's Major Purchase Index is based on the reponse to the question: "‘In view of the general economic situation, do you think now is the right time for people to make major purchases such as furniture or electrical goods?"
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