UK Consumer Confidence Unchanged for Second Consecutive Month

UK GfK Consumer Confidence printed weaker than expected remaining at -21 in February (vs -19 forecast) although on a year-on-year basis, this month's reading is a +15 point improvement.

• The chart below shows that since inflation moved notably above the 2% target in mid-2021 consumer confidence has generally been inversely correlated. And hence since headline inflation started to moderate towards the end of 2022, consumer confidence has improved.
• However, more recently as inflation has begun to approach more 'normal' levels, the relationship is beginning to weaken, as price increases become less dominant in consumers' minds.
• In terms of the month-on-month changes, 2 subcomponents were down, whilst 3 increased. The General Economic Situation over the last 12 months and the Major Purchase Index both fell 2 points to -45 and -27, although both remaining above March 2023 levels.
• Meanwhile, Personal Financial Situation over the next 12 months improved 2 points to 2, after stalling at 0 for 2 successive months, this a a significant 31 points improvement year-on-year. Finally, Personal Financial Situation in the last 12 months and General Economic Situation over the next 12 months both improved by 1 point, keeping all subcomponents comfortably above levels seen in March 2023.
• March's survey was conducted among a sample of 2007 individuals from March 1st to March 15th, 2024.