Britons are feeling less confident about the future, new research published today has indicated.
The GfK Consumer Confidence indicator for the UK fell to -21 in February from -19 in January, defying forecasts for a slight improvement to -18.
It marks the fall in four months, suggesting weaker confidence in personal finances and the broader economic outlook.
Households’ expectations about their finances over the coming year were unchanged at zero, making it the only component not to decline.
GfK called this “encouraging”.
Joe Staton, client strategy director at GfK, said: “This metric is key to understanding the financial mood of the nation because confident householders are more likely to spend despite the cost-of-living crisis.”
The spectre of a high-for-longer interest rate climate was a primary reason for the slip in confidence, said analysts.
Interest rates have held at 5.25% since mid-2023, but stubborn inflation at 4% – double the BoE’s 2% target – has put pressure on the bank to hold tight to avoid overheating the economy once again.
“Looking forward, it will be interesting to see what the forthcoming Budget delivers in terms of taxation and inflation,” said Staton.
“These are important issues to everyone – especially in an election year. The recent performance of the economy will play a crucial role in determining results at the ballot box.
“All the measures this February are better than a year ago, but consumer confidence alone will not carry us into a brighter economic future.”