Consumer Confidence Slips As Britons’ Household Finance Concerns Increase

New analysis from YouGov and the Centre for Economics and Business Research (Cebr) shows that consumer confidence fell in January to its lowest level since March 2021.

In the face of households’ cost of living concerns, the overall index declined by one point from 110.0 to 109.0. While any score over 100 means more consumers are confident than not, January’s figure puts the index at its lowest point since March 2021 – with five of the eight metrics falling, including both household finance measures.

YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents answer questions about household finances, property prices, job security, and business activity, both over the past 30 days and looking ahead to the next 12 months.

The measure looking at people’s household financial situation over the coming 12 months has dropped to 79.1 – its lowest point since October 2013. The score covering the past 30 days sits at 80.6 – the last time it was down at this level was April 2020 when the UK was in its first lockdown.

For the second month in a row, both job security scores declined. Job security over the past 30 days fell by 1.0 point to 93.3 while the figure looking ahead to the coming 12 months dropped by 2.7 points to 116.4. Business activity measures were a mixed bag. While scores for the past month fell by 2.8 points to 108.9, scores for the next year increased by 2.4 points to 127.1.

Both house value metrics rose for the third month in succession. The backward-looking measure rose by 1.8 points to 129.1, climbing to its highest level since September 2014. The forward-looking figure also increased by 1.8 points to 137.4 and sits at level not seen since March 2017.

Darren Yaxley, Head of Reputation Research at YouGov:
“Consumers’ economic outlook at the start of the year reveals a complicated picture. Although the headline consumer confidence slipped by a point in January, there was a lot going on under the surface that shaped their economic optimism. While consumers’ outlook for their household finances has not been as bleak since the autumn of 2013 homeowners’ views of the property market have not been this strong since September 2014. Both are likely to be shaped over the coming months by announcements that took place at the start of February, after this data was collected – the announcement of the increase in the energy price cap and the Bank of England raising interest rates.”

Sam Miley, Senior Economist at Cebr:
“This month’s drop in the YouGov/Cebr Consumer Confidence Index highlights the impact of the rising cost of living on household sentiment. Away from the headline indicator, consumers’ assessment of their finances over the coming year provides for a particularly stark reading - reaching a near nine-year low. Rising inflation and the planned uplift to National Insurance contributions are just two likely factors behind this weaker outlook. This sentiment is also mirrored in Cebr’s latest forecasts, with real disposable incomes expected to fall year-on-year and the household savings ratio set to narrow significantly.”