Lack of Christmas cheer among consumers

Both the latest GfK NOP and Nationwide consumer confidence measures showed little sparkle with the former down 2 points in December to -33 and the latter down 1 point to 40 in November. With both measures firmly at recession levels it is likely that the UK economy will be officially declared in recession next spring with the release of the Q1 GDP estimate confirming 2 quarters of negative growth.

Deepening problems surrounding the future of the euro and the lack of political leadership in establishing a common way forward have led to a further slump in economic confidence, down 10 points to -41 on the GfK measure. This uncertainty is set to dampen demand which is already suffering from the lack of bank lending. That said, both GfK and Nationwide spending data was a little better than expected and may point to Christmas spending not being quite as dire as many analysts predict.

Both personal finance measures are unchanged in December as is the measure of household finances. Savings confidence fell back with fewer people likely to save compared to November and a year ago. Improving inflation expectations is the bright spot in the survey – up to its best level since March 2010. With unemployment edging higher in recent months people continue to be uncertain about new jobs being created. The Nationwide November measure fell back sharply in both current and future measures, while the GfK measure gave back its November gain. The job picture is a crucial bell-weather of the mood of the public.

To find out more about the mood of the consumer and our tracking surveys please contact John Gilbert +44 (0) 208 944 7510 or 07740 027968 or contact j.gilbert@jgfr.co.uk