Consumer confidence has fallen on all measures as January blues set in

Overall levels of consumer confidence are at their lowest since December 2023 with a five-point drop on last month’s figures. 

The biggest drops since December were around consumer views of both how the economy has performed over the last 12 months (down seven points) and how strong it will be in the coming year (down eight points). The January overall consumer confidence index score was -22. 

“New year is traditionally a time for change, but looking at these figures, consumers don’t think things are changing for the better,” said Neil Bellamy, consumer insights director at NIQ GfK. “These figures underline that consumers are losing confidence in the UK’s economic prospects.”

Labour’s economic plans have been put in turmoil in recent weeks due to soaring borrowing costs. This has raised the possibility of the government having to either raise taxes or cut spending to meet its commitment to cut debt as a share of national income by the end of the parliament. Flattish growth numbers have further raised pressure on the Treasury. 

The latest figures will be unwelcome for the government but the three-month average shows overall consumer confidence remains at its highest levels since April 2022. 

While the index measuring personal finances dropped by three points, it was two points up from January 2024. However, consumer views on their personal financial situation over the next 12 months were two points lower than last year.

Consumers were about as likely as they were last year to think now was the right time to make a major purchase – with most saying they do not think the time is right. However, they are increasingly likely to think now is the right time to put money aside. 

“This sharp increase is unwelcome because it’s another sign that people see dark days ahead and are therefore thinking of putting money aside for safety,” said Bellamy.