Consumer confidence has lifted slightly this month following a rollercoaster year, but market research firm GfK has warned that our willingness to spend will be hit by “the storm and stress of the year to come”.
GfK’s index showed a one point increase in overall consumer confidence to -7 in December.
Consumers remained “relatively confident” about their personal financial situation this year, but confidence in the general economic situation for the UK collapsed in the face of uncertainty about the future both at home and abroad.
Yet many consumers continued to make significant purchases, reflected in strong retail sales growth.
Looking ahead to 2017, GfK warned that confidence “will be tested” in 2017.
Joe Staton, head of market dynamics at GfK, said: “The past 12 months were a really turbulent year for confidence in the UK as consumers reacted to the dramatic economic and political turmoil of 2016.
“After a positive start to the year [January 2016, +4] the index plunged rapidly in post-Brexit Britain [July 2016, -12] with the recovery to September then evaporating by year end to limp home at -7 for December.
”In 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 of the year to come.”