United Kingdom: Consumer sentiment worsens in December
The GfK consumer confidence indicator fell from minus 13 points in November to minus 14 points in December. As a result, the index moved further into negative territory, where it has been since April 2016, highlighting that consumers are broadly pessimistic.
December’s decrease reflected consumers’ worsened views of their personal financial situation and the general economic situation over the next 12 months. However, consumers became more willing to make major purchases. Depressed consumer sentiment throughout Q4 bodes poorly for private consumption in the period.
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 support an improvement in consumer sentiment and private consumption growth in 2019.