UK Consumer Confidence decreases three points to -14 for August 2019

Confidence wanes in face of pre-Brexit nerves

GfK’s long-running Consumer Confidence Index decreased to –14 in August. All five measures decreased this month.

Joe Staton, Client Strategy Director at GfK, says:

“Until Brexit leaves the front pages – whenever that will be – consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation.

"That’s an important distinction because a significant development in August is the sudden drop in views on personal finances ‘over the next 12 months’ after the encouraging jump in this measure last month.

"For a long time, the downward momentum in the Overall Index Score has been associated with our views on economy. But reduced confidence is now affecting how we see our personal finances.

"If there is a continuation of that dip in our feelings about our ‘future wallets’, we’d quickly see a headline score (the average of our five sub-measures) crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis.

"We are not there yet, and we may not necessarily get there, but it’s a trend we need to watch carefully.”

UK Consumer Confidence Measures – August 2019

The Overall Index Score in August 2019 is -14. All five measures decreased in August.

Personal Financial Situation

The index measuring changes in personal finances during the last 12 months has decreased by two points this month to -1; this is five points lower than August 2018.

The forecast for personal finances over the next 12 months decreased by five points to +2 this month; this is six points lower than August 2018.

General Economic Situation

The measure for the general economic situation of the country during the last 12 months has decreased two points this month to -34; this is eight points lower than in August 2018.

Expectations for the general economic situation over the next 12 months have decreased six points to -38; this is 12 points lower than August 2018.

Major Purchase Index

The major purchase index decreased three points in August to +1; this is five points lower than in August 2018.

Savings Index

The savings index has decreased four points in August to +21; this is four points higher than at this time last year.

Download the data charts for UK Consumer Confidence August 2019

About GfK Consumer Confidence Index (UK)

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.

The UK Consumer Confidence Survey from GfK was conducted amongst 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 during 1st - 14th August 2019.

The figures contained within the Consumer Confidence Barometer have an estimated margin of error of +/-2%.

Results for the Consumer Confidence Barometer are normally available on the last working day of each month at 00.01am (unless the final working day of a month is a Monday, in which case the results are published on the Friday preceding the final working day); the release date for September is Friday 27th September 2019.

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 1996.

The table below provides 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)