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Households’ hopes for personal finances improved in February – index

Vicky Shaw, PA Personal Finance Correspondent
·2-min read

Households’ hopes for their personal finances over the next 12 months improved in February, reaching close to levels seen before the coronavirus lockdowns started, according to an index.

The findings could signal a confidence among some households to spend as coronavirus restrictions ease, helping an economic recovery.

The consumer confidence index compiled by market research company GfK (Growth from Knowledge), recorded an overall score of minus 23.

While this indicates that attitudes remain negative, it marks a five point improvement compared with a reading of minus 28 in January.

The survey takes into account how consumers feel about their own financial situation and savings as well as the wider economy.

The part of the index measuring how people feel about their financial situation over the next 12 months moved further into positive territory, from a score of two in January to four in February.

This is just two points lower than a score of six recorded on this measure in February 2020, the month before the UK coronavirus lockdowns started.

Looking at how people feel about the general economy over the next 12 months, the score moved from minus 44 in January to a less negative reading of minus 30 in February. A year ago – the score on this measure was minus 21.

Attitudes towards making major purchases improved by five points to minus 19 in February. But this is still 25 points lower than February 2020, when the score was in positive territory, at six.

Strong feelings that now is a good time to save also remain, with a score of 19 in February, up by one point compared with January and very close to a score of 20 recorded in February 2020.

Joe Staton, GfK’s client strategy director, said: “We need to be cautious because the positive tailwinds of the vaccination rollout are being met by the very strong headwinds of unemployment, the threat of inflation and the difficulty that many face in affording day-to-day living costs – all serious issues that can dampen consumer confidence.

“Perhaps the key lies in the healthier score for how we see our personal finances going forward as this will impact our spending plans that in turn will fuel the post-pandemic economy.

“That measure is up two points and is reinforced by an encouraging five-point boost for major purchase intentions. But will that confidence in our wallets continue through the balance of the lockdown and beyond?”

The index was based on a survey of 2,000 people across the UK in February.