Consumer confidence dips as ‘mounting pressures’ bite

According to GfK’s consumer confidence barometer, three of the five measures used to gauge overall confidence declined.

The major purchase index, which gives an indication as to how likely shoppers are to make big-ticket purchases, declined for the second consecutive month.

It fell five points on the index, from 10 to five.

GfK head of market dynamics Joe Staton said: “Any momentum behind the post-Brexit, debt-fuelled, consumer-spending boom now appears to be softening.

“Mounting pressures on disposable income are starting to bite as witnessed by two months of falling retail sales (ONS) and a further drop in the major purchase index.”

How people are feeling about their personal financial situations in the 12 months to come dropped four points, from a rating of seven in January to three in February.

Confidence wobble

Confidence about their personal financial situations over the past 12 months fell two points to one on the index.

“Against a backdrop of rising food and fuel prices, sterling depreciation, nominal earnings growth and a burgeoning fear of rapid inflation, concern about our personal financial situation for 2017 has contributed to a drop in UK consumer confidence this month,” Staton added.

Confidence in the general economic situation over the next 12 months edged up three points, as did confidence in the general situation over the past 12 months.

However, these two measures still stand at -20 and -21 on the index respectively.

Staton said: “Consumer spending continues to drive economic growth in the UK so any further fall in confidence could support forecasts for a slowdown of the overall economy this year.”