UK consumer confidence rose in January and had its highest reading in over two years, as a surprise rise in inflation appeared to not rattle the public.
The GfK consumer confidence index, which measures consumers’ attitude , picked up to -19 in January, up from -22 the prior month and -24 in November.
Joe Staton, client strategy director GfK, said: “Consumer confidence has started the year well with all measures up and a headline score of -19, the best since January 2022.
“Importantly, the view on our personal financial situation for the coming year has gained two points and now stands at zero.”
“This is exciting as it ends 24 consecutive months of negative scores for this measure and this significant change is the best single indicator for how the nation’s households feel about their income and expenditure.
Its major purchase index – which takes the temperature on Brits likeliness to make a big purchase –also rose by three points on December’s reading and by 20 points on last year’s.
Staton added: “Despite the cost-of-living crisis still impacting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation.
“On balance, while there is national and global turmoil, the Consumer Confidence Index has started 2024 on a positive note – let’s see if this optimism continues.”
Today’s reading comes despite the annual rate of consumer price inflation (CPI) speeding up for the first time in 10 months in December, rising to four per cent from November’s-two-year low of 3.9 per cent.
Linda Ellett, UK head of consumer, Retail and Leisure for KPMG, said: “Many people still face the prospect of large jumps in their mortgage when their fixed deal ends this year.
“And even more face higher costs for the likes of insurance premium renewals, or in-contract increases for mobile and broadband provision.”
“Household spending power is still gradually being eroded and in this environment it is little surprise to see that there is limited appetite for spending dwindling savings on major purchases, except perhaps – for those who can afford to – to temporarily take a break from it all on holiday.”