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London, 23.10.2020

Threat of double-dip in UK Consumer Confidence as index drops 6 points

GfK’s long-running Consumer Confidence Index decreased six points to -31 for October. All measures decreased in comparison to the September 25th announcement.

Joe Staton, Client Strategy Director GfK, says:

 “There’s a worrying threat of a double-dip in consumer confidence as concerns for our personal financial situation and even deeper fears over the state of the UK economy drag the Index down six points this month. Despite low inflation and rock-bottom interest rates, a buoyant housing market and a raft of Government financial stimulus measures, the prospect of rising unemployment is severely depressing our outlook. Worryingly, this data was collected before the new round of COVID-19 restrictions came into force and the end of the furlough scheme, so this will negatively impact the Index in the run-up to Christmas and the months beyond. Expect the autumn chill to give way to much stormier conditions.”

UK Consumer Confidence Measures – October 2020

The Overall Index Score decreased six points to -31 for October. All measures decreased in comparison to the September 25th announcement.

Personal Financial Situation

The index measuring changes in personal finances over the last 12 months is down two points       to -9; this is ten points lower than October 2019. 

The forecast for personal finances over the next 12 months is down one point this month at 0; this is also one point lower than October 2019.

General Economic Situation

The measure for the general economic situation of the country during the last 12 months has decreased by six points to -67; this is 34 points lower than in October 2019.  

Expectations for the general economic situation over the coming 12 months are down 12 points        at -50; this is 13 points lower than October 2019.

Major Purchase Index

The Major Purchase Index has decreased by six points to -27 in October; this is 28 points lower than it was in October 2019.

Savings Index

The Savings Index has dropped six points to +14 in October; this is seven points lower than this time last year.

GfK Consumer Confidence Barometer Charts October 2020.pdf

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About the survey

  • The UK Consumer Confidence Barometer is conducted by GfK on behalf of the EU, with similar surveys being conducted in each European country. In producing its own reports on the whole of Europe, the EU applies a seasonal adjustment to the data, to smooth out any changes that are functions, at least in part, of the time of year.
  • Historically, the UK data have not been seasonally adjusted in this way, and to maintain comparability, GfK continues not to apply this adjustment. This can lead to situations where the EU figures show different movements in a particular month from those produced by GfK. Individual months may be affected, but the long-term trend is not.
  • This month’s survey was conducted among a sample of 2,000 individuals aged 16+ on behalf of the European Commission.
  • Quotas are imposed on age, sex, region and social class to ensure the final sample is representative of the UK population.
  • Interviewing was carried out between 1st October and 14th October 2020.
  • The figures contained within the Consumer Confidence Barometer have an estimated margin of error of +/-2%.
  • The Overall Index Score is calculated using underlying data that runs to two decimal points.
  • Results for the Consumer Confidence Barometer have now reverted to a monthly frequency. Forthcoming confirmed dates are as follows: November 20th and December 18th.
  • Any published material requires a reference to both GfK and the European Commission e.g. ‘Research carried out by GfK on behalf of the European Commission’.
  • This study has been running since 1974. Back data is available from 2006.
  • The table below is an overview of the questions asked to obtain the individual index measures:

Personal Financial Situation

(Q1/Q2)

This index is based on the following questions to consumers: ‘How has the financial situation of your household changed over the last 12 months?’

‘How do you expect the financial position of your household to change over the next 12 months?’ (a lot better – a little better – stay(ed) the same – a little worse – a lot worse)

General Economic Situation

(Q3/Q4)

This index is based on the following questions to consumers: ‘How do you think the general economic situation in this country has changed over the last 12 months?’

‘How do you expect the general economic situation in this country to develop over the next 12 months?’

(a lot better – a little better – stay(ed) the same – a little worse - a lot worse)

Major Purchase Index

(Q8)

This index is based on the following question to consumers: ‘In view of the general economic situation, do you think now is the right time for people to make major purchases such as furniture or electrical goods?’

(right time – neither right nor wrong time – wrong time)

Savings

Index

(Q10)

 

This index is based on the following question to consumers: ‘In view of the general economic situation do you think now is?’ (a very good time to save – a fairly good time to save – not a good time to save – a very bad time to save)

(Commented on but not included in the Index Score)



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