Consumer confidence rebounds from historic low

24th February 2023

A survey by data company GfK shows that consumer confidence has unexpectedly bounced back from historic lows to hit the highest level since April 2022. GfK’s consumer confidence index has risen by seven points in February, although the headline score remains at a “severely depressed” -38. While confidence in the general economic situation over the next 12 months is up by 11 points to -43, confidence in personal finances increased by nine points to -18. The overall uptick follows the index falling three points to a near-historic low of -45 in January.

Joe Staton, Client Strategy Director, GfK said “Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year.”

“While it’s too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over? The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023. However, many challenges remain and this may be nothing more than a bubble of hope – and bubbles always burst”