Consumer confidence edges up despite big ticket turn off

GfK’s Consumer Confidence Index crept up two points this month, although it remained in negative territory at -5.

But the major purchase index fell two points to +10, six points below the +16 recorded in January 2016.

Despite that fall, three of the five measures used to measure confidence increased, as shoppers’ outlook on their personal financial situation over the past year and over the next 12 months both improved.

Consumers’ optimism over their finances during the past 12 months advanced three points to +3, slightly below the +4 recorded in January 2016.

Shoppers’ confidence about their personal finances over the coming year improved by four points to +7, but this also represented a fall year-on-year.

The view of the general economic situation over the past year improved two points to -24, but that still represented a sizeable decline on the -3 GfK registered a year ago.

Consumers’ confidence about the general economic situation over the coming 12 months remained flat at -23, down 18 points on the -5 in January 2016.

GfK head of market dynamics Joe Staton said: “The combination of Brexit jitters, Blue Monday and a wobbly pound pushing up prices contributed to keeping UK consumer confidence negative at -5 this month.”

He cautioned: “Is the decline in the major purchase index this month a foretaste of slowing consumer spending throughout 2017?

“Rising inflation and weak income growth is forecast to squeeze households’ disposable income, and these two factors could conspire to depress confidence for the year ahead. It’s certainly difficult to see where the oomph will come from over the short term.”