But does January’s dip in Major Purchase Index predict slowing consumer spending for 2017?
GfK’s long-running Consumer Confidence Index has increased two points this month to -5. Three of the five measures saw increases in January, one was unchanged, and the other decreased.
Joe Staton, Head of Market Dynamics at GfK, says:
"Despite strong GDP and record FTSE highs, the combination of Brexit jitters, Blue Monday, and a wobbly pound pushing up prices contributed to keeping UK consumer confidence negative at -5 this month. Although consumers report that they are feeling upbeat about their personal financial situation for the coming year (four-point increase to +7), stubborn concerns about the wider economy looking back 12 months (-24 points) and ahead 12 months (-23 points) are ensuring the Overall Index Score remains stuck in gloomy territory.
And is the decline in the Major Purchase Index this month a foretaste of slowing consumer spending throughout 2017? Rising inflation and weak income growth is forecast to squeeze households’ disposable income, and these two factors could conspire to depress confidence for the year ahead. It’s certainly difficult to see where the oomph will come from over the short term.”
UK Consumer Confidence Measures – January 2017
The Overall Index Score has increased two points this month to -5. Three of the five measures saw increases in January, one was unchanged and the other decreased.
Personal Financial Situation
The index measuring changes in personal finances during the last 12 months has increased by three points this month to +3; this is one point lower than this time last year.
The forecast for personal finances over the next 12 months has increased by four points this month to +7; this is two points lower than January 2016.
General Economic Situation
The measure for the General Economic Situation of the country during the last 12 months has increased two points this month to -24; this is 21 points lower than January 2016.
Expectations for the General Economic Situation over the next 12 months have remained at -23 this month; this is 18 points lower than January 2016.
Major Purchase Index
The Major Purchase Index has decreased two points this month to +10; this is six points lower than this time last year.
The Savings Index has increased three points to -2; this is seven points lower than January 2016.
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