A winter of discontent...?


Sunday 28th October 2018

The ICG's John Gilbert looks at what the next few months has in store for us...

The monthly UK Consumer Confidence Barometer (CCB), undertaken by GfK on behalf of the European Commission*, fell 1 point in October to -10, unchanged on a year ago. 
 
Confidence is up in 1, and down in 4 of the 6 UK regions. It is unchanged in the North at -7.  Only in the South is confidence up, 5 points higher at -4. Sentiment tumbled in all the other 4 regions, down the most in Scotland, 9 points lower at -17, down 8 points in Wales to -15 and down 6 points in the Midlands and Northern Ireland, both at -16.  
 
Of the 5 sub-measures comprising the headline measure:

  • The financial situation of households over the past 12 months is unchanged at +1 on the month, and is up 1 point on a year ago (0) 
  • The expected financial situation of households over the next 12 months is 1 point down on September at +4, and unchanged on October 2017 
  • The general economic situation measure over the past 12 months is unchanged in October at -28, and is 1 point above 12 months ago (-29)  
  • The general economic situation measure in the coming 12 months edged down 1 point on the month at -28, and is 2 points lower than October 2017  (-26) 
  • The measure of consumer sentiment to making major purchases in the current economic situation dropped by 2 points on the month to +4, and is up 1 on a year ago (+3) 

 The survey also asks other questions about spending and saving.  Expected spending on major purchases (such as furniture or electrical goods) in the next 12 months compared with the previous 12 months is down 3 points on September and on a year ago at -8.  Spending confidence on major purchases of household goods is 5 points lower than in September but up 1 point on October  2017.  
 
Saving confidence fell slightly in October.  While the same proportion of people likely to save in the next 12 months (58%) is unchanged on September, there is a drop in people believing it being a good time to save (50% v 52% September).  Compared to October 2017 saving confidence is much improved (+29 vs +19).  Currently 56% of households are saving, up from 54% in September and from 53% a year ago.  Households overall financial position (24) is unchanged on the month and is up 1 point on a year ago.  It continues above the long term average (+20). 
 
The jobs outlook improved a little in October.  The measure of unemployment expectations is 1 point better at +19 on the month, but down 3 points on a year ago (+16).  A higher score represents rising unemployment expectations.  A net balance of 22% of adults (27%, September) believes unemployment will rise in the next 12 months (19%, October 2017).  The measure of inflation expectations in October (90) improved by 3 points on the month, but worsened by 3 points on 12 months ago (87). 
 
 John Gilbert, Chief Executive of JGFR commented: 
 
 “As the UK enters the tough final Brexit straight, with a winter likely to see record numbers of the public suffering from depression brought on by the incessant uncertainty and divisiveness of Brexit, the good news is that financial wellbeing continues at well above the long run average.  Where the austerity narrative continues is in the mood of the nation which Brexit has made increasingly pessimistic.  An upbeat Budget designed to help consumer sentiment in the coming months may result in a better than expected festive season for retailers but the real test will be whether a re-run of the winter of discontent in 1979 can be avoided with an EU deal which can appeal to all” 
 
*The UK Consumer Confidence Survey was conducted by GfK NOP among a sample of 2,001 adults aged 16+, representative of the UK population, and carried out between 1-16 October 2018.  The JGFR October 2018 UK Consumer Confidence Monitor will be published on Wednesday November 7th. 

Notes and Enquiries:  
 

John Gilbert 07740 027968 / 0208 944 7510 email: j.gilbert@jgfr.co.uk; twitter @JohnGilbertJGFR