Households are feeling more confident that the strength of their finances, house prices, and job security will increase in a year’s time, according to an index.
The overall consumer confidence index score in January was 102.9, up from 102.6 the previous month, the research from YouGov and the Centre for Economics and Business Research (Cebr) found.
Scores above 100 indicate that consumers are more confident than not.
The research is based on 6,000 interviews carried out every month about household finances, property prices, job security and business activity, both recently and looking ahead to the next 12 months.
While perceptions about recent job security and household finances were down in January, when looking forward to 12 months’ time confidence was up on both of these measures, the index found.
Confidence in property values increasing was up when looking at households’ perceptions of what has happened over the past month, as well as what they think will happen in the next 12 months.
Perceptions about business activity in the past 30 days and in the next 12 months were more negative in January, however.
This measure asks workers if activity increased or decreased at their workplace in the past month and what it is likely to be like in 12 months’ time.
Darren Yaxley, director of reputation research at YouGov, said: “Understandably with so many shops shut and businesses closing, expectations for business activity both in the short-term and long-term are not good.
“But, driven by hopes that personal finances and home values will increase and that job security will be stronger in the coming 12 months, January’s consumer confidence index offers some encouraging signs for 2021.
“However, it’s important to note that almost every metric is still lower than it was a year ago and with so many difficult decisions on the horizon, such as the end of furlough and a tough Budget from the Chancellor in March, and with so much resting on a successful vaccine rollout, there is still likely to be lots of uncertainty in the minds of consumers.”
Kay Neufeld, head of macroeconomics at Cebr said: “Given the challenging start to the year with yet another national lockdown, it is encouraging to see that consumer sentiment is holding up in January as the consumer confidence index increases by 0.3 on the month…
“However, UK consumers seem to be taking solace in the fact that the national vaccination effort is running smoothly so far with a shot of a return to normality in the second half of the year.
“Moreover, the surprisingly resilient housing market is fuelling hopes that prices will continue to rise in 2021, leading to increases in the forward looking home value and household finances indicators.”