U.K. GfK consumer sentiment index rises in January, confidence may drop in year ahead

The GfK’s consumer confidence index for the U.K. has risen by two points in Jan to -5. In the prior month, the consumer sentiment index was at -7. Consensus expectations were for the index to drop to -8 in January. Out of the five measures, three witnessed rises in January, while one remained the same and the other fell.

The personal finances index rose three points to 3 in January, one point lower than a year ago. Meanwhile, the forecast for personal finances over the next 12 months rose four points in January to 7, two points lower than in January 2016. The measure for General Economic Situation of the U.K in the last 12 months rose 2 points to -24 in January. This is 21 points lower than in January 2016.

Expectations for the General Economic Situation in the next 12 months stayed at -23 in January, which is 18 points lower than January 2016. The Major Purchase Index dropped two points to 10 in January, which is six points lower than in January 2016. On the other hand, the savings index rose three points to -2.

GfK Market Dynamics head Joe Staton stated that in spite of robust GDP and record FTSE highs, the combination of Brexit jitters, Blue Monday and a wobbly pound pushing up prices added to maintaining the U.K consumer confidence negative at -5 in January.

“Although consumers report that they are feeling upbeat about their personal financial situation for the coming year (four-point increase to +7), stubborn concerns about the wider economy looking back 12 months (-24 points) and ahead 12 months (-23 points) are ensuring the Overall Index Score remains stuck in gloomy territory. Rising inflation and weak income growth is forecast to squeeze households’ disposable income, and these two factors could conspire to depress confidence for the year ahead”, added Joe Staton.

At 06:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bearish at -104.963, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -44.1711. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex