GfK's Consumer Confidence Index has recorded a two-point increase to -20 in February, reflecting a shift in consumer sentiment following a turbulent period. All five core measures of the Index showed improvements from last month, marking a positive shift for UK consumers, though confidence remains below pre-crisis levels.
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Neil Bellamy, Consumer Insights Director at GfK, commented, 'In contrast to last month when all five core measures were down, this month they are all up. The biggest improvement is in how consumers see their personal finances for the coming year, with an increase of four points that takes this measure out of negative territory to +2. The Bank of England interest rate cut on February 6th will have brightened the mood for some people, but the majority are still struggling with a cost-of-living crisis that is far from over. Prices are still rising above the Bank of England's target; gas and electricity bills remain a challenge for many households. So, it's no surprise that consumer views on the general economic situation are still lower than 12 months ago, suggesting that people don't expect the economy to show any dramatic signs of improvement soon. Politicians looking for bright spots on the horizon will be disappointed.'
The positive shift was most notable in personal finances. The measure for the outlook of personal finances in the next 12 months rose four points to +2, marking an improvement compared to the same period last year. Similarly, the index measuring changes in personal finances over the past year increased by three points to -7, a notable seven-point improvement compared to February 2024.
Table: NIQ.
In terms of the broader economy, however, consumer confidence remains cautious. The index for the general economic situation in the last 12 months improved slightly, up two points to -44, but is still one point lower than this time last year. The outlook for the economy over the next 12 months saw a smaller improvement of three points, bringing the score to -31, but it remains seven points worse than February 2024.
The Major Purchase Index, which reflects consumer intentions for big-ticket purchases like furniture or electronics, also saw a positive uptick, rising by three points to -17. This represents an improvement of eight points compared to the same period last year, indicating that while confidence remains low, consumers are starting to consider making larger purchases again.
The Savings Index remained stable at +30, which is one point higher than in February 2024, reflecting ongoing caution but also a sense of financial resilience among consumers.
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