Consumer confidence dips to four-year low in December

UK consumer confidence fell to -13 this month, down one point from November and the fourth consecutive month of decline.

According to the GfK Consumer Confidence Index, December was the worst month for shopper confidence in 2017.

And with no clear outcome in sight for Brexit or the level of interest rate rises, head of market dynamics Joe Staton said “there’s every likelihood that 2018 will take us lower”.

The decline in customer sentiment was driven by a falling confidence in shoppers’ personal finances over the last year and their inclination to make big-ticket purchases, which decreased two points to -3 and one point to -4 respectively.

Shopper sentiment towards their personal finances for the year ahead held steady at 2, as did their outlook on the wider economy over the next 12 months at -28.

However, the saving index fell four points in December to 4.

The only metric to increase during the period was consumer confidence in the general economy over the past 12 months, which edged up one point to -31.

“The Overall Index Score has slipped from - 7 in January to -13 in December – and not a single positive score in between. In fact, we have not been in positive territory for nearly two years,” said Staton.

“It’s a similar story for the Major Purchase Index, a robust +10 at the start of the year in January but a sombre slide down to -4 by year’s end.

“And it’s no surprise it’s the reverse for our Savings Index, at -5 last December and -2 in January, then -4 in February, all indicating at the beginning of the year limited intentions to squirrel money away.

“But we saw positive scores from April onwards, suddenly people were thinking of saving, getting more cautious as the year progressed.

“We need to see several issues move on before the downward trend of the consumer mood changes. We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise.

“But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”