Consumer confidence declines in January

Consumer confidence has dropped in January as it continues to bump along at near-record lows.

According to GfK, its long-running Consumer Confidence Index has fallen by three points this month to -45.

Joe Staton, client strategy director, GfK said: “After a short-lived and weak rally in Q4 last year, UK consumer confidence has slipped to -45 in January. Consumers have a New Year hangover – but it’s of the economic kind – with high levels of pessimism over the state of the wider economy. And unlike a conventional hangover, this one won’t vanish quickly.”

GfK’s index measuring expectations for the general economic situation over the next 12 months has fallen by one point to -54 this month, although the forecast for people’s personal finances has increased by two points to -27.

Meanwhile, GfK’s major purchase index is down six points to -40, which is 30 points lower than January last year.

Staton said: “This month’s six-point decline in the major purchase index does not augur well because consumer spending is a driving force of our economy and future growth. With inflation continuing to swallow up pay rises, and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good. One thing we can be sure of is that 2023 promises to be a bumpy ride.”

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