Dark days ahead for consumers as GfK’s confidence reading for January plummets

If blue’s the colour that reflects January consumer confidence in the latest British Retail Consortium’s data, GfK’s reading for this month has turned decidedly dark blue.

Its latest Consumer Confidence Index released Friday (24 January) recorded steep falls in perceptions of the wider UK economy “as consumers see dark days ahead”.

Headline consumer confidence fell five points to -22 in January while all but the savings index in the accompanying measures were down in comparison to last month’s announcement.

The index measuring changes in Personal Finances during the last year is down three points at -10, two points better than January 2024, while the forecast for Personal Finances over the next 12 months is also down three points at -2, two points lower than this time last year.

As for the General Economic Situation of the country during the last 12 months is down seven points to -46, five points lower than in January 2024. And expectations for the General Economic Situation over the next 12 months dropped eight points to -34, some 13 points worse than January 2024.

Meanwhile, the Major Purchase Index is down four points to -20, static on this month last year.

Finally, the Savings Index jumped nine points to +30, three points higher than this time last year, bad news for retail as a shift to consumer belt-tightening reflects a save-not-spend mentality.

Neil Bellamy, Consumer Insights director, NIQ GfK, said: “New year is traditionally a time for change, but looking at these figures, consumers don’t think things are changing for the better. This month’s results show a decline in all five measures. These figures underline that consumers are losing confidence in the UK’s economic prospects.” 

He added: “While the Savings Index on motivation to save money is not included in the calculation of the Overall Index Score, it’s notable that it has leapt nine points in January to +30. This sharp increase is unwelcome because it’s another sign that people see dark days ahead and are therefore thinking of putting money aside for safety.”