UK Consumer Confidence Drops

The Figures Came From A Survey By GfK

20.12.2013

Steven Beahan, Partner | +44 (0)114 294 7868

Consumer confidence in December has dropped, according to GfK's latest index report.

While the overall situation has improved in the last 12 months, confidence among consumers in the UK has now fallen to -13 on its scale, down from -12.

Analysts at the firm that produced the forecast claim that although a single point drop is not significant, the fact the index has fallen for three months in a row represents a wider downward trend.

This will likely push the government into action on an issue that has long been the lynchpin of the Labour party's campaign. The so-called cost of living crisis, claims Ed Balls, is pushing more and more Britons across the country into poverty and this has negatively impacted the economy.

But Conservative and Liberal Democrat ministers claim that it will take time for the wider economic recovery to positively affect the day-to-day lives of the population, as growth is still in its infancy.

Nick Moon, managing director of social research at GfK, said:  "With no media coverage of bad economic news - and indeed continuing coverage of good news - the explanation for the last quarter of declining confidence most likely results from people's sense of how well or rather badly - off they personally feel."

The major purchase index, which measures people's ability to buy large items like cars, fridges and renovation projects, was also seen to fall in the GfK report. While consumers' appetite for bigger products fell by four points to -17, this is still ten points higher than at the same point in 2012.

But despite this bad economic news, a new Office for National Statistics (ONS) report confirms gross domestic product growth figures of 0.8 per cent were accurate.

There had been concerns that the ONS' estimate was overly optimistic about the state of the manufacturing sector but this has been proven not to be the case.

A spokesperson from the Treasury told the BBC the data shows its economic plan is working.

Expert Opinion
This is of course a small drop in confidence and it will be interesting to see in the coming months if the recent declines which have been seen develop into a greater trend.

"Key to preventing this is the performance of small businesses, which are widely regarding by both the Government and the business world in general as key drivers of the continued improvement being seen in the economy.

"Innovative start-ups are well-placed to take advantage of the opportunities which may arise in the coming months, with such activity set to then have a knock-on effect in terms of generating positivity within both businesses and across the general public."
Steven Beahan, Partner