All five measures making up GfK’s Consumer Confidence Index have declined in January, putting the overall score at its lowest since the end of 2023.
The new year has brought with it gloomy news for marketers hoping for a more optimistic consumer, with the overall consumer confidence score dropping by five points in January, according to GfK’s Consumer Confidence Barometer.
The Overall Index Score, which brings together five different measures of consumer confidence, decreased by five points to -22 in January. This means the UK’s consumer confidence has fallen back to where it was at the end of 2023, when the economy had freshly emerged from a period of very high inflation.
Of the five different scores that make up the Overall Index measure, all of them declined in January’s Consumer Confidence Barometer. The most notable declines came in consumer attitudes to the overall UK economic situation. Consumers are both more negative about how the economy has fared over the past 12 months, and more downcast in their expectations of how it will perform over the coming 12 months.
The index covering the general economic situation of the country during the last 12 months fell seven points to -46, down five points from January 2024. While expectations for the year ahead declined by eight points to -34, a hefty fall of 13 points versus the same period last year.
This downbeat attitude among consumers extends to their own financial situation. The index measuring changes in personal finances over the past year is down three points at -10. The attitude to personal finances over the next year has also slid into negative figures, down three points at -2.
Consumers also say they are less likely to purchase a big ticket item at the moment with the major purchase index falling four points to -20.
Taken all together it makes for extremely gloomy reading for any marketer hoping for a more upbeat consumer at the start of 2025.
“If marketers were hoping the new year might offer some relief from past woes and usher in a new sense of consumer optimism, there’s no chance of that,” says Neil Bellamy, consumer insights director at NIQ GfK.
“If the months to come bring more data like January’s, life will get tough again,” he continues. “Marketers know the start of 2025 is a time for digging deep into their expertise, and for marshalling the sales and consumer data that will allow them to respond in the right way to the obvious challenges.”
GfK also records a Savings Index, demonstrating consumers’ inclination to save. This is not included when calculating the overall index score but, notably, it was the only measure recorded by the GfK to go up, rising by nine points in January to +30.
Marketers hoping for a more robust consumer sentiment would be wrong to find hope in this uptick, notes Bellamy.
“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,” he says.
Unsurprisingly, other figures giving a picture of business sentiment mirrors the gloominess seen in the consumer numbers. The British Chambers of Commerce’s (BCC) Quarterly Economic Survey for the fourth quarter of 2024 suggested that confidence among firms was at its lowest since the economy tanked following Liz Truss’s disastrous mini budget in 2022.
