Consumer confidence slips amid fears over UK economy

The GfK’s Consumer Confidence Index slipped one point to -10 this month, despite consumers’ increasing willingness to snap up big-ticket items.

Sentiment surrounding the UK’s economic situation over the next 12 months dropped two points month-on-month to -26.

That represented a nine-point slump compared to October 2016.

Confidence towards the UK economy over the last 12 months was down one point compared to September and 10 points year-on-year.

GfK said those were the only two of the five measures used to assess consumer confidence that declined in October.

The major purchase index, which measures shoppers’ willingness to splash out on big-ticket items, increased two points in October to +3, although that was still down 11 points year-on-year.

That was helped as consumers’ optimism around their own personal finances remained relatively robust.

Confidence in their personal finances over the past 12 months edged up one point month-on-month to +1, while sentiment about their finances in the year ahead was flat compared to September’s +4.

GfK head of market dynamics Joe Staton said: “The tiny shift up a point in how we view our personal finances over the past year is counter-intuitive given rising living costs, an imminent interest rate rise and the reality that we earn less in real terms in 2017 than in early 2006.

“Our enthusiasm for spending, as witnessed by the uptick in the Major Purchase Index, is more worrying than reassuring. Surging credit card use is fuelling spending at the expense of our appetite for saving, which is growing at the slowest rate since the start of the 2008/2009 financial crisis.”