UK consumer confidence falls in February as technical recession is a bummer for Brits
UK consumer confidence fell two points in February as reports of a technical recession dampened hopes.
GfK’s consumer confidence report, which measures members of the public attitudes, fell 21 points in February down from 19 points the prior month.
January’s reading was the highest in over two years as Brits became more hopeful about falling inflation, but it has now slipped back again.
Its major purchase index – which takes the temperature on Brits likeliness to make a big splurge–also fell five points on last month’s reading.
Joe Staton, client strategy director at GfK, said there’s “a mixture of bad news and good news for February”.
Respondents’ attitudes towards their personal finances improved again, rising 14 points in the month, up from 12 in January and 26 in the exact same period last year.
“The good news is that optimism for our personal financial situation for the next 12 months has not slipped back,” Staton added.
This month it was revealed the UK slipped into a technical recession in the last quarter of 2023.
However, there are hopes that barriers which prohibit customers losing their purse strings such as high energy bills and inflation will improve this year.
It is expected that energy bills, which have skyrocketed in the last two years because of global conflicts, will fall to their lowest levels since 2022.
UK chancellor, Jeremy Hunt, will also present his Spring Budget in March, which is rumoured to dish out some further relief on personal taxes.
Linda Ellett, UK head of consumer, retail and leisure for KPMG, said: “The reality for many households remains adapting spend to meet higher essential costs, with stubborn inflation further fuelling in-contract price rises for the likes of mobile and broadband.
“Many households also still face higher mortgage rates when their fixed-term deal ends this year – and while rates have fallen compared to what they were a few months ago, those consumers will still see a significant jump in their monthly payment compared to what they were paying.
She added: “A lowering of energy prices is offering households some welcome news, and they are looking to the Budget and the Bank of England for more.”