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Summary
- The GfK Consumer Confidence Index revealed a slight decline in January 2021.
- The third lockdown introduced by the government to help in restraining the virus has hit the consumer sentiments, says the survey.
The latest figures for the UK consumer confidence index for the month of January have been released. The monthly report published by Growth for Knowledge (GfK) indicated a significant fall in the index by 2 points.
The data from the market research firm GfK recorded an index value of -28 in January after gaining 7 points in the previous month. The consumers’ confidence was boosted by the rollout of the Covid-19 vaccines in December, jumping by the most in eight years to -26 from -33 in November.
However, the index was higher by one point in contrast with the Reuters poll that had estimated a greater dip, forecasting a value of -29 for January.
The survey was released on 22 January, which noted that the confidence measures among British consumers dipped in January over concerns relating to the economy after the UK went into yet another lockdown beginning 5 January.
(Data Source: GfK)
The restrictive measures allowed only retailers selling essential items to function, forcing non-essential retailers to remain shut to curb the widespread infection.
But with the Britain’s Covid-19 vaccine inoculation program in progress, the Bank of England has been consistently looking for signs of a recovery in confidence among consumers and companies.
Interesting Read: UK Expands Vaccine Rollout as Global Immunisation Drive Gears Up
Joe Staton, the client strategy director at GfK, said the reason behind the supressing of the overall index lies in the decrease in the expectations for the economy over the coming year by nine points and fall in the major purchases index.
However, the personal financial situation for the next 12 months in the GfK’s survey showed some signs of optimism among the people.
An insight on the different measures of the index
There are six sub-heads that constitute the overall confidence scores. Let’s see how they have performed in January:
Personal Financial Situation over the last year: The index measuring changes in personal finances over the last 12 months was up by one point to -8 in December, while it was still some nine points below in comparison with the previous year.
Personal Financial Situation over the next year
The consumers seemed to be worried about the state of their personal finances in next year, with the index falling by one point to 2. However, it was below four points when compared to that recorded in January last year.
General Economic Scenario over the last year
The barometer registered a 2-point decline in consumer confidence relating to the economy over the next 12 months compared to last month, heading back to the same figure of -67 registered for last November. The figure is 39 points below the last January level.
General Economic Scenario over the next year
The measure for the UK’s general economic situation over the past 12 months plummeted by 9 points to -44 as the consumers lose confidence about the economy in 2021, some 20 points lower than in January 2020.
Major Purchase Index
The two-point drop in the major purchase index came for this month as non-essential retailers were shutdown, moving to a value of -24 from -22 in the previous month. However, the level of confidence the buyers had in making major purchases was 25 points below on a Y-o-Y basis.
Savings Index
GfK’s savings index jumped by one point from 17 to 18 for January, remaining only two points lower than the same period in the previous year.
