Resilient British consumers grow more confident about personal finances, but see storm clouds ahead for the UK economy

 
Jasper Jolly
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Britons are in good spirits about their personal situation – despite the gloomy economic forecasts (Source: Getty)

British consumers have ended the year on a resilient note, with confidence rising despite gloomy forecasts for the economy, according to a long-running survey.

Consumer confidence increased in December by one point, driven higher by a positive attitude towards making major purchases such as furniture or white goods, says the index compiled by market research company GfK.

Brits were feeling better about their personal financial situation over the next year, with morale rising by a point and the major purchase index rising by seven points.

Read more: Businesses are confident about the UK economy says survey

The likelihood of UK consumers saving also increased markedly, with a six-point rise in the last month to minus five.

However, the overall index of confidence is still negative, at minus 7, as worries over the economy increased, pushing down expectations for the economy even further, at minus 23. A reading below zero indicates net negative sentiment.

The findings reflect other measures of confidence after the Brexit vote, which show businesses and consumers relatively sure of their own financial wellbeing while remaining doubtful for the UK's broader prospects.

Retail spending has also held up, growing in every month since the referendum vote according to the Office for National Statistics, while consumer spending also increased in the post-vote third-quarter.

Joe Staton, head of market dynamics at GfK, said: “While consumers remain relatively confident about their personal financial situation, confidence in the general economic situation for the UK has collapsed in the face of uncertainty about the future both at home and abroad.”

While UK consumers started the year in good spirits, reflecting healthy GDP growth at the end of 2015, the vote to leave the European Union saw confidence plunge to its lowest point since 2013.

Confidence quickly rebounded as short-term predictions of economic chaos were proven untrue. It has since fluctuated as the public follows the twists and turns of the post-Brexit politics.

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