Published on February 28th, 2017 | by The GC Team0
Consumer confidence falls in February as inflationary pressures bite
Consumer confidence fell again in February as Britons’ concern for their personal finances deepened.
GfK’s Consumer Confidence Index fell by one point to -6, six points lower than at this time last year, against a backdrop of rising prices in the wake of Brexit.
Pressures on disposable income have also started to bite, as evidenced by a further fall in the Major Purchase Index. The figure fell five points to +5 in February, seven points lower than at this time last year.
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.”
Rising food and fuel prices, sterling depreciation, nominal earnings growth and a “burgeoning fear of rapid inflation” have contributed to the fall in consumer confidence, he added.
Despite signs that consumers are tightening their belts due to inflationary pressures, expectations for the general economic situation over the next 12 months increased three points to -20.
But Staton cautioned: “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.”