GfK says Britons less confident in January on savings, outlook for personal finances
Britons were less optimistic in February, judging that both the outlook for their personal finances and ability to save had worsened, the results of a widely-followed survey revealed.
GfK's headline consumer confidence index for February slipped by one point from January's level to a reading of -6.0.
That was exactly as economists had expected, amid projections for higher consumer prices to increasingly rein in Britons' purchasing power, although the latest economic forecasts from the Bank of England included large upwards revisions to the outlook for GDP in 2017, in part as Britons ran dwon their personal savings.
Joe Staton, Head of Market Dynamics at GfK, said: "[...] Any momentum behind the post-Brexit, debt-fuelled, consumer-spending boom now appears to be softening. Mounting pressures on disposable income are starting to bite as witnessed by two months of falling retail sales (ONS) and a further drop in the Major Purchase Index (this month down by five points). Consumer spending continues to drive economic growth in the UK so any further fall in confidence could support forecasts for a slowdown of the overall economy this year."
A gauge of changes in Britons' personal finances over the past twelve months fell by two points to +1, which was four points below the February 2016 level.
Similarly, the forecast for personal finances over the next twelve months decreased four points to +3.0, which was five points beneath the level of a year ago, GfK said.
Unsurprisingly, the Major Purchase Index, which measures whether now is a good time to go shopping for big-ticket items, declined by five points to +5.0, to stand seven points below the year-earlier mark.
In parallel, the Savings Index retreated two points to -4.0 and was left two points below the equivalent 2016 figure.
On a brighter note, measures tracking perceptions of the economy's performance over the past 12 months and the outlook for the next 12 both rose by three points, to -21.0 and -20.0, respectively.
However, the former was still 11 points below the February 2016 level and the latter eights points lower.
As of 1020 GMT the yield on the benchmark 10-year Gilt was up by three basis points to 1.18% and cable off by 0.05% to 1.2436.