Consumer Confidence

According to the BBC, there is ‘one measure that can tell us a lot about the state of the UK economy’. That measure is Consumer Confidence. This is a measure of what people are apparently ‘feeling’ about their prospects, currently and into the future.

NIQ, the world’s leading consumer intelligence company (sic) and producer of the GfK Consumer Confidence Barometer states that ‘By asking about household income and the general economy over the last 12 months, and looking ahead to the next year, subscribers can anticipate and plan for emerging patterns of behavior. The Index tracks changes in the sentiment, which may go up or down a few points, or dive several points over a month as we’ve seen over the last decades.’

Something has happened with the indicator over the last few years. Prior to 2021 there was a downward fall in confidence by each of the four groups measured (16-19, 30-49, 50-64 and 65+) by which time all groups had a negative outlook on their confidence. Between 2021 and 2023 there was a slight rise in confidence followed by a deeper slump with confidence falling to between -20% and -55%. Since then things have improved but towards the end of 2024 the indicator has split into two distinct groups. 

The two younger groups have seen confidence rise with 61-29s going positive, while the two older groups had seen confidence fall. But why? Who knows?

The indicator measures confidence in the job market, the status of an individual’s  personal finances and their readiness to spend which is interesting in itself. 

As someone within the most mature category, I find such measurements odd. I am retired now and so give little if any thought to the job market. I have a private pension (fortunately) and can look forward to my state pension in a few months and so my personal finances are clear and set. I am lucky enough to have everything that I need and want for very little. I spend when I want to and don’t when I don’t.

Based upon this information I don’t understand how my confidence in the three markers can go up or down. Confidence is subjective and cannot be accurately measured objectively. It’s a nice try but I just don’t buy it.