UK consumer confidence improves, but economic concerns linger
By Josh White
Date: Friday 21 Feb 2025
(Sharecast News) - Consumer confidence in the UK increased month-on-month in February, according to fresh survey data released on Friday, although concerns around the state of the economy put a dampener on optimism.
The GfK consumer confidence index rose two points to -20 in February, marking a slight improvement compared to the prior month.
While consumers remained cautiously optimistic about their financial situation, with an index measuring changes in personal finances over the past year improving three points to -7, they were increasingly uncertain about the economic outlook.
The forecast for personal finances over the next 12 months improved by four points to +2, indicating a modest boost in spending power.
On the other hand, expectations for the general economic situation have actually worsened, with a measure of the country's economic health over the past year deteriorating by two points to -44.
That was one point lower than in February last year.
Despite the mixed signals, consumers were starting to feel more confident about making major purchases.
The major purchase index jumped three points to -17, indicating a willingness to spend on big-ticket items.
Savings plans meanwhile remained intact, with the savings index holding steady at +30.
"In contrast to last month when all five core measures were down, this month they are all up," said NIQ GfK consumer insights director Neil Bellamy.
"The biggest improvement is in how consumers see their personal finances for the coming year with an increase of four points that takes this measure out of negative territory to +2.
"The Bank of England interest rate cut on 6 February will have brightened the mood for some people, but the majority are still struggling with a cost-of-living crisis that is far from over."
Bellamy said prices were still rising above the Bank of England's target, while gas and electricity bills remained a challenge for many households.
"It's no surprise that consumer views on the general economic situation are still lower than 12 months ago, suggesting that people don't expect the economy to show any dramatic signs of improvement soon.
"Politicians looking for bright spots on the horizon will be disappointed."
Reporting by Josh White for Sharecast.com.
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