UK consumer confidence hits four-year low in December - GfK
Consumer confidence in the UK fell to a four-year low in December, according to a survey released on Thursday.
GfK's consumer confidence index declined to -13 this month from -12 in November, missing expectations for it to remain unchanged and hitting its lowest level since December 2013. The index was also sitting lower than it had been following the Brexit vote.
Meanwhile, the index tracking expectations for the general economic situation over the next 12 months remained weak, at -28, five points lower than last year. The index measuring changes in personal finances during the last 12 months fell two points to -3, while the forecast for personal finances in the next year stayed the same at +2.
Joe Staton, head of Market Dynamics at GfK, said: "We need to see several issues move on before the downward trend of the consumer mood changes. We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise. But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "In the last few months, households have been hit by higher inflation, slowing job gains and higher interest rates. And while the Chancellor reduced the scale of the fiscal squeeze in the late November Budget, he prioritised extra funds for government departments, not households. Tax and benefit changes will subtract just over one percentage point from year-over-year growth in households’ real incomes next year, double 2017’s drag.
"The breakthrough in Brexit talks, meanwhile, does not appear to have boosted sentiment. GfK conducted its survey between December 1 and 15, so around half of the responses would have been collected after December 8, when the UK government and the European Commission announced that they had reached an agreement."