UK consumers are feeling more confident about the economy as inflation comes down from its peak.
January figures for market research firm GfK’s long-running Consumer Confidence Index show the best headline score in two years as optimism about the next 12 months strengthens.
All five measures were up in comparison to last month’s survey, although most remained in negative territory.
Notably, sentiment about people’s own finances over the coming year increased two points to zero, which is 27 points higher than this time last year.
“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,” explained Joe Staton, client strategy director at GfK.
Expectations for the country’s general economic situation over the next 12 months rose four points to -21. This is 33 points better than in January 2023.
The overall index of consumer confidence increased three points to -19, the highest since January 2022.
“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,” Staton said.
“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.”