MNI BRIEF: UK Consumer Confidence Dips On Cost Of Living Fears

Consumer confidence dropped by 4 points to -19 in January, with consumers citing fears of inflation as a top concern for 2022, according to the latest GfK survey released on Friday. In a finding that may make for grim reading at the Bank of England, 87% of respondents said have already experienced inflation, up from 67% a year ago. Some 84% expect prices to continue to rise in 2022. Numerous members of the Bank’s Monetary Policy Committee have spoken of the danger of allowing inflation expectations to become entrenched.

The index of consumers’ personal financial situation declined by 3 points to -2, but GfK Client Strategy Director Joe Staton expressed surprise over the resilience of confidence in January. “The personal financial situation is stronger than I thought it would be,” he told MNI. The major purchase index dropped 4 points to -10.

“The personal finance situation over the next 12 months concerns me,” added Staton, noting that the rising cost of living is increasingly troubling consumers. Some sixteen percent of respondents cited “having enough money to live right and pay the bills” as their biggest worry in January, topping the pandemic and the state of the NHS. “Rather than physical health concerning consumers, it will be economic health this year,” said Staton.