UK consumer confidence weak by recent standards in Feb: S&P Global

The CSI, which gauges household financial well-being, labour market conditions, household spending, savings and debt, rose in February to 45.4 from January’s 12-month low of 43.6, but still registered the second-lowest level of confidence seen over the past ten months.

Readings above 50 signal improvement; readings below 50 signal deterioration.

Perceptions about current and future finances at UK households improved in February, but remained subdued.

Views on current finances picked up from January’s 17-month low, but the latest reading was well below the survey’s pre-pandemic average and markedly lower than the average reading over the second half of last year, to signal a down-shifting of sentiment in finances so far this year.

Views on the 12-month financial outlook for households improved, but were still the second lowest seen over the past ten months, and also far below the post-election record-high seen back in July 2024, having suffered a further negative shift following the budget last October, a release from S&P Global Ratings said.

Households’ positive perceptions of the labour market have provided a key support to consumer sentiment in recent years, but recent months have seen this prop weaken.

Although the survey’s overall gauge of labour market sentiment lifted higher in February, the least reading was the second-lowest recorded over the past year.

Having fallen to an 18-month low in January, the survey’s gauge of income from employment recovered some of the loss suffered at the start of the year, but was still the second lowest for eight months.

However, job security remained negative on balance for a second month running, as the number reporting lower security continued to outnumber those feeling safer in their employment, albeit to a lesser degree than January.

Job insecurity was prevalent in all major sectors in the United Kingdom bar information technology.

Despite rising incomes helping reduce household debt levels marginally and for the first time in five months, household savings continued to fall in February, dropping at one of the sharpest rates recorded over the past year.

UK households’ expectations of lower interest rates intensified in February, according to the CSI data, which were largely collected after the Bank of England’s February rate cut.

While 34 per cent of respondents expect an increase in rates as the next move from the central bank, that compared with 42 per cent in January. Meanwhile, some 38 per cent anticipate a rate cut as the next move, up from 24 per cent in January.

Fibre2Fashion News Desk (DS)