Little cheer in October as UK consumer confidence falls for third month - GfK

By

Nigel TAYLOR

Published
Oct 22, 2021

It was all looking so much better in July. UK consumer confidence has since taken a battering with the financial pulse of the nation dropping for third month in a row in October, according to GfK’s latest figures.

And it’s no wonder. Against a backdrop of “cheerless domestic news” including product shortages, surging inflation, the likelihood of interest rate rises and climbing Covid rates, “it is not surprising that consumers are feeling down-in-the mouth about the chilly winter months ahead,” said Joe Staton, Client Strategy Director for GfK.

Worryingly for British retail in the run-up to Christmas, there’s also a further decline in the intention to make major purchases, while the sharpest concern is how consumers see the future economy.

“The financial mood of the nation has changed and consumers could do with some strong tonic to lift their spirits,” added Staton.

And so to those dreary figures released Friday that show all GfK’s index measures falling in comparison to September, with the headline Consumer Confidence Index for October down four points to -17.

Importantly, expectations for the general economic situation over the coming 12 months collapsed 10 points to -26, but it was still 24 points higher than October 2020. And the Major Purchase Index also fell four points to -10 in October, 17 points higher than it was this month last year.

The index measuring changes in personal finances over the last 12 months dropped one point to -5, albeit four points better than last October when there was a brief break in Covid-related lockdowns. And the forecast for personal finances over the next 12 months has fallen four points to +1, one point higher than this time last year.

The measure for the general economic situation of the country during the last 12 months is down three points at -46, some 21 points higher than in October 2020.  

Finally, the Savings Index has stayed the same at +22 in October, eight points higher than this time last year, suggesting consumers are focused on preserving their cash rather than spending it.