Consumer confidence reaches highest level in two years despite global turmoil

26 January 2024 , 09:22

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Consumer confidence has reached its highest level in two years (Image: PA Wire/PA Images)

Consumer confidence in the UK has got a big boost and reached its highest level in two years, according to a survey by GfK.

GfK's Consumer Confidence Index stands at minus 19 this month, which is the best score since January 2022. How households feel about their income and expenditure - the best single indicator, GfK explained, is now standing at zero, with negative scores falling away after 24 months.

Opinions about the economic situation for the next year have also improved, increasing by four points to minus 21 a whopping 33 points higher than last January. Meanwhile, the index that measures the confidence in buying expensive items is up three points to minus 20 20 points better than a year ago.

Joe Staton, who works at GfK as a client strategy director, said: "Consumer confidence has started the year well with all measures up and a headline score of minus 19, the best since January 2022. Despite the cost-of-living crisis still impacting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation."

Finally, he noted: "On balance, while there is national and global turmoil, the Consumer Confidence Index has started 2024 on a positive note let's see if this optimism continues." Linda Ellett from KPMG UK said: "While inflation and interest rates are gradually reducing, prices are still increasing and consumers are seeing costs still going up."

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"Many people still face the prospect of large jumps in their mortgage when their fixed deal ends this year. And even more face higher costs for the likes of insurance premium renewals, or in-contract increases for mobile and broadband provision."

"Household spending power is still gradually being eroded and in this environment it is little surprise to see that there is limited appetite for spending dwindling savings on major purchases, except perhaps for those who can afford to to temporarily take a break from it all on holiday."

"In KPMG research, households feeling worse about their financial security outnumber those feeling more secure by almost two to one."

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Lawrence Matheson