2026-01-23 00:27:00
UK consumer morale improved slightly in January, but confidence in the broader economy remains deeply negative.
Summary:
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UK consumer confidence rose to a five-month high in January
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Households more positive on personal finances
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Economic outlook confidence deteriorated further
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Growth sluggish as inflation and wage trends remain mixed
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Consumers remain cautious on spending
UK consumer confidence improved modestly in January, reaching its strongest level in several months as households became more optimistic about their own financial prospects, even as concerns about the broader economy remained entrenched. According to the latest survey from GfK, the headline consumer confidence index rose one point to -16, marking the highest reading since August 2024 and matching economists’ expectations.
Despite the uptick, sentiment remains firmly negative by historical standards. GfK noted that the index has not been in positive territory for a decade, underscoring the depth and persistence of household caution since the UK’s decision to leave the European Union. The January improvement was uneven, with three of the five underlying confidence measures deteriorating over the month.
The survey pointed to a growing divergence between perceptions of personal finances and views on the wider economic outlook. Expectations for household finances over the next 12 months improved noticeably, rising four points to +6, suggesting consumers feel better placed to manage their own budgets. In contrast, confidence in the economic outlook weakened further, with the forward-looking measure falling two points to -31, highlighting ongoing scepticism about the UK’s growth trajectory.
The data come against a mixed macroeconomic backdrop. UK economic growth has remained sluggish, inflation ticked higher last month for the first time since mid-2025, and wage growth has shown signs of cooling. However, Bank of England Governor Andrew Bailey has indicated that inflation is likely to return close to the central bank’s 2% target by April or May, offering some reassurance on the inflation outlook.
Retail conditions remain fragile. Official data due later on Friday is expected to show a modest decline in December retail sales, reinforcing concerns that consumer spending remains under pressure despite improved confidence in personal finances. The survey results suggest households are increasingly focused on what they can control — spending, saving and debt management — while remaining wary of broader economic and political uncertainties.
Overall, the January data point to tentative stabilisation in consumer sentiment rather than a meaningful turnaround. While improved perceptions of personal finances are a positive sign, the persistent gloom surrounding the wider economy suggests UK consumers are likely to remain cautious, limiting the scope for a strong consumption-led recovery in the near term.
