Consumer confidence improves slightly in January

GfK’s consumer confidence index has reported a slight increase of two points in January to -5, with only three out of the five measures recording increases British consumers are showing that they are concerned over the wider economic situation.

Joe Staton, head of market dynamics at GfK, said: "Despite strong GDP and record FTSE highs, the combination of Brexit jitters, Blue Monday, and a wobbly pound pushing up prices contributed to keeping UK consumer confidence negative at -5 this month.”

The slight improvement was driven by consumers feeling upbeat about their personal financial situation for the coming year, as the index relating to the forecast for personal finances rose by four points to +7.

While the measure relating to expectations for the general economic situation over the next 12 months remained at -23, GfT states this is 18 points lower than January 2016.

In addition, the major purchase index decreased by two points to +10, six points lower than this time last year. Meanwhile, the savings index saw an improvement of three points to -2.

Staton added: “Is the decline in the major purchase index this month a foretaste of slowing consumer spending throughout 2017? Rising inflation and weak income growth is forecast to squeeze households’ disposable income, and these two factors could conspire to depress confidence for the year ahead. It’s certainly difficult to see where the oomph will come from over the short term.”