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U.K. consumers are a little less upbeat in February, with concerns over the state of the economy growing ahead of a likely election this year, a monthly survey published Friday said.
Research group GfK’s Consumer Confidence Barometer dipped two points on month to minus-21 in February, flipping expectations that the index would improve a little, to minus-18, according to a consensus of economists polled by The Wall Street Journal.
Compared with January, four of the five components used to compile the index were down, with only the measure of personal-finance expectations for the next 12 months holding steady, the data said.
Indexes for the economic situation over both the last year and the next 12 months dipped, as did the measure for propensity to buy major purchases.
The downturn in respondents’ outlook for the economy will likely be in the minds of voters in a general-election year.
“The recent performance of the economy will play a crucial role in determining results at the ballot box,” GfK client strategy director Joe Staton said.
February’s survey of consumers is also the last one before Treasury chief Jeremy Hunt’s budget statement next month.
Yet the survey was a mixture of bad news and good news, he said. The recent improvement in the index, which in January reached a two-year high, has stalled, but consumers’ outlook for their personal finances hasn’t slipped back.
Indeed, there are signals that the recent cost-of-living squeeze, prompted by high inflation and tight financing conditions, is easing. The personal-finance measure, while flat on month, was considerably better than February last year, an important signal that consumers have become more confident in spending, Staton noted.
“All the measures this February are better than a year ago, but consumer confidence alone will not carry us into a brighter economic future,” he added.
