United Kingdom: Consumer sentiment remains pessimistic in January
January 31, 2019
The GfK consumer confidence indicator was unchanged at minus 14 points in January. As a result, the index remained in negative territory, where it has been since April 2016, highlighting that consumers are broadly pessimistic.
January’s reading was underpinned by consumers’ more pessimistic view of the general economic situation. Consumers grew marginally more optimistic about their personal financial conditions, while their willingness to make major purchases was unchanged.
Going forward, consumer sentiment is unlikely to see a significant improvement until the cloud of uncertainty currently surrounding the Brexit withdrawal process is lifted. Assuming a no-deal Brexit is avoided, reduced political uncertainty and a recovery in real wages could boost consumer sentiment and support private consumption in 2019.
UK Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.4% in 2019 and 1.5% in 2020.
Author: Oliver Reynolds, Economist