The British public’s confidence in both their personal finances and the wider economic outlet has “nose-dived” in October, with the latest GfK Consumer Confidence Barometer showing a sharp turnaround in sentiment among UK consumers. Where confidence had been rising slowly but steadily for months, the latest results show a sharp fall in every single metric.
The overall index score – the combined measure of confidence – dipped by nine points to a measure of -30. Critically, the major purchase index, which indicates the likelihood of consumers to make big-ticket purchases, fell by 14 to -34.
“That’s bad news for marketers looking to encourage people to spend money in the run-up to the festive season. But the picture people have of what the future holds is also evident,” Joe Staton, client strategy director at GfK, tells Marketing Week.
“Consumers showed patience during Covid and have navigated through inflation for more than a year, but now they are looking ahead and asking: ‘When will our lives get back to normal?’”
This uncertainty is driven in part by the increased costs related to fuel and heating, mortgage and rental rates, a slowing jobs market and new uncertainties posed by conflict in the Middle East.
With no end in sight, it has led to drastically reduced confidence as consumers seek to protect their savings rather than spend. The public feels much more negative about the overall economic situation over the next 12 months, recording a fall of 8 points to -32. That is still positive compared to the same measure for October 2022, when it stood at -61.
That in turn has translated to a 6-point fall in confidence around people’s personal financial situation, with that score now standing at -8.
Though it does not count towards the overall index score, the savings index is down two points and now stands at 25.
Staton says: “That’s all the more reason for marketers to continue their good work in protecting sales and laying the ground for longer-term investment in the health of their brands.”
However, the most recent IPA Bellwether indicates that marketing budget growth is slowing as wider economic activity stalls.