January 2022: UK Consumer Confidence Briefing

The monthly UK Consumer Confidence Barometer undertaken by GfK shows confidence fell in 4 of the 6 major UK regions

The monthly UK Consumer Confidence Barometer (CCB), undertaken by GfK is 4 points lower on the December measure at -19 but is 9 points above January 2021 (-28).

Confidence fell in 4 of the 6 major UK regions. The biggest fall on the month is in the South, 9 points lower at -16 with sentiment in Scotland and Wales dropping 5 points to -24 and -26 respectively. In the Midlands confidence shed 4 points to -22. Only in Northern Ireland, up 4 points to -7, is sentiment higher on the month while in the North it is unchanged at -20.

Of the 5 sub-measures comprising the headline measure:

  • The financial situation of households over the past 12 months is down 1 point to -6 on the month, and up 2 points on a year ago (-8)
  • The expected financial situation of households over the next 12 months is 3 points down on the month at -2, 4 points down on 12 months ago (+2)
  • The general economic situation measure over the past 12 months slumped by 8 points on the month to -47, but is up 20 points on 12 months ago (-67)
  • The general economic situation measure in the coming 12 months dropped 8 points to -32, but is 12 points higher than in January 2021 (–44)
  • The measure of consumer sentiment to making major purchases in the current economic climate fell 4 points on the month to -10, but is up 14 points on 12 months ago (-24)

Saving confidence improved

The survey also asks other questions about spending and saving. Expected spending on major purchases (such as furniture or electrical goods) in the next 12 months compared with the previous 12 months is unchanged at -11 in January but is up 11 points vs January 2021 (-22). Overall spending confidence on major purchases of household goods declined by 4 points on the month to –21 but is up by 25 points on 12 months ago (-46). All 3 categories of big-ticket spending rose in the 3-monthly poll.

Saving confidence improved in January. 61% of consumers are likely to save in the next 12 months, up from 58% in December, and unchanged on 12 months ago. 53% of adults believe it to be a good time to save (51% December, 55% January 2021). Compared to December (+33) saving confidence is 7 points higher (+40). Currently 58% of households are saving, up from 55% in December and 1 point up on 57% a year ago. Households overall financial position (+26) is 2 points up vs December (+24) and 2 points down vs January 2021 (+28).

The jobs outlook worsened on the month, 3 points lower (+23) vs December (+20) but up 29 points on a year ago (+52). A higher score represents rising unemployment expectations. A net balance of 29% of adults (22%, December and 50% a year ago) believes unemployment will rise in the next 12 months. The measure of inflation expectations worsened in January, 2 points lower at +104, while the measure of inflation over the past 12 months (+99) worsened by 1 point on the month, continuing at a multi-year high. December’s Inflation Index combining current and future measures is +203, a new Millennium high.

The JGFR Financial Wellbeing and JGFR Feel-Good Indices worsened in January. The former fell by 5 points vs December to +19 but is 29 points higher than 12 months ago (-10), while the latter fell by 16 points to -44 but is up 25 points on a year ago (-69).

John Gilbert, Director, JGFR commented:

As expected for the second successive year there is no New Year bounce in confidence as consumers face a challenging winter. While some boost from the success of the vaccination programme and the milder Omicron Covid-19 variant will have improved the heath / NHS outlook, the rising cost of living and a weariness over political leadership looks set to continue to lead to a downbeat mood in the coming months

Featured image: Everyonephoto Studio / Shutterstock

John Gilbert

John Gilbert runs JGFR Research and has built up over many years a store of data tracking the mood and financial activity of UK consumers and written many research reports. John has a background in economics, banking and financial services in the City . His interests cover business, sport, charities, philanthropy, politics and higher education. John is a Fellow of the Marketing Society, a member of the Society of Professional Economists and is a supporter of the Archive of Market and Social Research.

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