LONDON: Consumers in the UK appear to have been spending in the shops this Christmas, despite their pessimism over the economy and uncertainty over their own financial circumstances, according to the latest GfK Consumer Confidence Index.
The overall index rose one point in December to -7, driven by a seven-point jump in the major purchase index – one of the five constituent parts of the total – which leapt from +5 to +12; that was also five points higher than the December 2015 major purchase index.
The only other index to register an increase was the forecast for personal finances over the next 12 months, which rose one point this month to +3; this was six points lower than December 2015.
The index measuring changes in personal finances during the last 12 months, meanwhile, decreased by one point to 0, three points lower than the same point last year.
The corresponding indexes for the general economic situation made for unhappy reading: that for the past 12 months decreased one point to -26, 21 points lower than December 2015; that for the next 12 months was down one point to -23, or 17 points lower than December 2015.
"Consumers are gung-ho when it comes to spending intentions and that's despite their view that the general economy is drifting lower and lower," Joe Staton, Head of Market Dynamics at GfK, told Marketing Week.
"I think consumers have made up their minds to avoid any anticipated price hikes by having lots of Christmassy shopping fun right now as concern grows about not being able to afford the things they want tomorrow," he added.
He reflected on a turbulent year in which the GfK Consumer Confidence Index has swung backwards and forwards between positive and negative scores and did not expect that the next 12 months would bring any respite.
"Looking ahead to 2017, against a backdrop of Brexit negotiations, the decline in the value of sterling, and the prospect of higher inflation impacting purchasing power, we forecast that confidence will be tested by the storm and stress (Sturm und Drang) of the year to come."
Data sourced from GfK, Marketing Week; additional content by Warc staff