Consumer confidence holds steady despite uncertainty

30 January 2018

UK consumer confidence remained flat in fourth quarter of 2017 compared to the previous quarter, according to the latest Consumer Tracker from Deloitte, published yesterday (January 29).

The quarterly survey of more than 3,000 UK consumers, carried out between 5 and 10 January 2018, saw overall consumer confidence remain flat at -7% in the fourth quarter of 2017. The results represent the first time that confidence has not fallen in the final quarter of the year since the Tracker began in 2011.

The Consumer Tracker found confidence in the level of disposable income rose by four percentage points compared to the previous quarter. Meanwhile, consumer confidence around managing personal levels of debt also rose, by one percentage point.

 In addition, the survey revealed record levels of confidence in relation to job security, rising by three percentage points to -4%. However, consumers were less confident about job opportunities and career progression, which fell by two percentage points from the previous quarter.

Ian Stewart, chief economist at Deloitte, said: “Despite a fierce squeeze in spending power last year, consumers went into 2018 in pretty good spirits. Low interest rates and plummeting unemployment mean that it’s not all been bad news for consumers.

“With record levels of job vacancies and an economy that continues to grow we would expect wage growth to edge higher this year as inflation eases. The worst of the squeeze on incomes is probably behind us.”

The latest Consumer Tracker also revealed the continued squeeze on spending has caused consumers to be more careful about their spending, with discretionary spend falling by one percentage point compared to the previous year. By contrast, price inflation has seen spending on essential items rise by two percentage points year-on-year.

Ben Perkins, head of consumer business research at Deloitte, added: “We typically see a dip in confidence in the final quarter of the year, with consumers being surveyed at a time when they are conscious of their spending levels and health after the festive period. So the fact that confidence has remained flat is a clear indication that the UK’s consumers are remaining resilient to spending pressures.”