Has confidence stalled or does the encouraging score on personal finances point a bright way forward?

GfK’s long-running Consumer Confidence Index was unchanged at -21 in March. Three measures were up and two were down in comparison to last month’s announcement.

Joe Staton, Client Strategy Director GfK, says: “Consumer confidence stalled at minus -21 in March, following the two-point dip in February. The improved Personal Finance measure (next 12 months) at +2 is encouraging because it’s the first positive and the highest score since December 2021. This is welcome news given the challenges faced by Britons of fiscal drag, higher costs for fuel, rising council taxes and utilities eroding any increases in wages or other income. But is there a note of worry this month? Look back to last year and it’s clear the improvements in consumer confidence seen most months since January 2023 have vanished.  Moreover, this month the Major Purchase Index has dropped two points, the view of the wider economy over the past year is down and the Savings Index has dived four points. Are we temporarily on pause, or are consumers about to press ‘reverse’? In the run-up to the next UK General Election, these are important questions for the future health of the economy.” 
 

The Overall Index Score was unchanged at -21 in March. Three measures were up and two were down in comparison to last month’s announcement.  

The index measuring changes in personal finances during the last year is up one point at -13; this is 13 points better than March 2023.  

The forecast for personal finances over the next 12 months is up two points at +2, which is 23 points higher than this time last year. 

The measure for the general economic situation of the country during the last 12 months is down two points at -45; this is 17 points higher than in March 2023.   

Expectations for the general economic situation over the next 12 months have increased by one point to -23; this is 17 points better than March 2023.

The Major Purchase Index is down two points to -27; this is six points higher than this month last year. 

The Savings Index has decreased four points to +25 in March; this is four points higher than this time last year.

Measuring 50 Years of Consumer Confidence

January 2024 marks 50 years of the UK Consumer Confidence Barometer. There is no other consumer research project with the longevity, rigour and reliability of the Consumer Confidence Barometer. Each month since January 1974, this study has provided insight into how UK consumers feel about their personal finances and the wider economy, as well as the outlook for the next 12 months. Through the winter of discontent, the Falklands War, economic boom and bust, the Brexit vote, and most recently the coronavirus pandemic, CCB has seen many highs and lows over five decades.

The highest value of the Overall Index Score – the headline score – was in January 1978, when it reached +21. It reached +16 twice in 1979 (first in July and again in September). The lowest score recorded was -49 in September 2022, and other lows include -39 in July 2008, during the global financial crisis, and a score of – 35 in March 1990, in the lead-up to the 1990/1991 recession. The largest monthly increase was in May 1993 when the headline score jumped 12 points. There have been seven monthly drops of 10 or more since the survey started, with the largest by far happening during the coronavirus crisis when it dropped 25 points from -9 in mid-March 2020 to -34 at the end of March.  

If you’d like the 50th-anniversary consumer confidence report, click here to download.