Consumer confidence rose slightly in December but remains low due to concerns over the UK’s economic outlook.
- The consumer confidence index increased by one point to -17, indicating a cautious public sentiment.
- Forecasts for personal finances show slight improvement, yet overall confidence remains unchanged.
- The major purchase index is stable, while the savings index saw a decline.
- Black Friday sales provided a temporary boost, but long-term economic perceptions hinder sustained confidence.
Consumer confidence in December saw a marginal rise with the index climbing one point to -17. Despite this, there is an overarching cautious sentiment among the public regarding the UK’s economic future. The concern is primarily due to the ‘continuing uncharitable view’ on the general economic situation.
Forecasts for personal finances have moved into positive territory, with predictions showing one to three points higher than last year. Personal financial situations improved by two points over the year to sit at -7. Expectations for financial outlook over the next 12 months increased two points to +1, offering a glimpse of optimism amidst economic apprehensions.
The broader economic outlook, however, showed no change, maintaining its position at -39. Consumer sentiment, overall, is expected to hold at -26, reflecting persistent economic worries. The major purchase index, a significant measure of confidence in buying high-value items, remains unchanged at -16. Meanwhile, the savings index experienced a drop of three points, landing at +21, highlighting uncertainty about future financial security.
Neil Bellamy, Consumer Insights Director at GfK, remarked that 2024 has seen less fluctuation in consumer confidence compared to previous years. The year witnessed an eight-point spread in confidence scores, significantly narrower than the 23-point and 30-point ranges seen in 2023 and 2022, respectively. Bellamy noted that the UK General Election had a notable impact, with post-election optimism overshadowed by a seven-point drop in September due to concerns over economic policies.
Black Friday delivered a brief reprieve for retailers, with strong sales performance recorded. According to GfK’s data, there was a 1.8% increase in value and a 7.7% rise in volume for technology, durables, homeware, and seasonal products relative to Black Friday 2023. Sales turnover during Black Friday week reached £992 million, outperforming the average weekly figures of 2024 by 110%.
Frasers Group CFO Chris Wootton highlighted a weakening in consumer sentiment before and after the Budget, attributing this to the unsettling nature of economic news and its compounded effects. This perception has influenced their decision to revise profit expectations downward by £25 million, as tougher trading conditions have resulted in an 8.4% decline in sales within its retail division.
While December saw a slight boost in consumer confidence, ongoing economic concerns continue to weigh heavily on public sentiment.
