Consumer confidence index in the UK - Data and Analysis (2000-2032)

Consumer confidence tends to correlate strongly with changes in underlying economic growth, employment, inflation, and real household disposable income - movements in house prices, stock market volatility, changes in perceived prospects for the global economy and changes in other metrics of economic performance also have a significant baring on confidence. Consumption expenditure accounts for approximately 60% of total expenditure in the United Kingdom, yet lower levels of confidence indicate that consumers are more likely to save more, spend less, and reduce borrowing. Over the five-year period through 2026-27, the CCI is forecast to drop at a compound annual rate of 0.3%.In June 2016, the United Kingdom voted to leave the European Union and, subsequent to the triggering of the Article 50 in March 2017, the process of exiting the union was initially scheduled to take two years to complete. The unexpected outcome gave rise to a great deal of economic uncertainty which, in turn, has been a key contributor towards contracting consumer confidence since. In the year of the referendum vote (2016-17) alone, the CCI declined by 4.8% and, in 2017-18, consumer confidence slipped further - the CCI retracted by 2.3% - in large part due to uncertainty regarding the nature of future trade agreements with the European Union and a degree of economic instability. Meanwhile, a slew of negative headlines regarding EU withdrawal negotiations (e.g., the prospect of a 'no deal' scenario and delayed negotiations regarding the future of the Irish border) compounded a further decline in confidence over 2017-18. Additionally, rising inflation combined with weak wage growth to exacerbate the negative effect on consumer confidence as disposable incomes were somewhat depressed.In 2018-19, consumer confidence continued on its downwards trajectory, with the CCI posting a 0.6% year-on-year contraction. While EU Withdrawal Bill negotiations seemingly advanced with a draft agreement published in November 2018, political unrest ensued as parliament remained divided on initial negotiations and the tabled proposal. As the government then continued to debate the feasibility of the tabled withdrawal agreement, and whether or not it represented the best possible scenario for UK sovereignty, several ministers were vocal with the stance against said agreement. Consequently, political tension and a split parliament induced a mood of despondency among domestic consumer groups as to how people viewed the long-term economic outlook of the United Kingdom.With former Prime Minister Theresa May's preliminary Brexit deal not being ratified by parliament and with said former Prime Minister officially resigning towards the tail-end of July 2019, the 2019-20 fiscal year began life characterised by political uncertainty and a stalemate in Brexit negotiations. Furthermore, 2019-20 saw two delays to "Brexit day", the first extension to 31 October 2019 and the second extension to 31 January 2020, in addition to the premiership of Boris Johnson, which began in July 2019. Failure to get a Brexit deal over the line in a timely manner naturally inflated uncertainty in the UK economy which, in turn, blighted confidence among the public during the early stages of the 2019-20 fiscal year. However, the consolidation of Boris Johnson's premiership in the December 2019 general election and the UK's eventual withdrawal from the EU bloc on 31 January 2020 eased a degree of uncertainty in the UK economy - a transition period ensued through December 2020, during which the United Kingdom retained access to the single market and continued to abide by EU laws until conclusive terms of the EU-UK Trade and Cooperation Agreement were negotiated in earnest and ratified on 1 January 2021. While this helped to marginally offset depleted confidence in the early stages of 2019-20, the CCI index still posted an overall decline of 1% year on year.Effectively gaining momentum in the UK market in February 2020 and worsening thereafter, the COVID-19 (coronavirus) pandemic ripped through markets both domestically and globally. While the absolute ramifications of the pandemic, from both a public health and economic perspective, remain somewhat uncertain as many international restrictions remain enforced, current evidence of severe disruption to supply chains, stock markets, currency markets, commodity markets, consumer demand and business activity, induced an exogenous economic shock, whereby the economy entered a recessionary period. While public-sector intervention has intended to ease the economic and social burden of the pandemic - emergency measures include the Bank of England (BoE) slashing the base interest rate to a record-low 0.1% on 19 March 2020, and the government announcing the launch of a Coronavirus Business Interruption Loan Scheme for small businesses on 23 March 2020 - market shocks blighted confidence among consumer groups. For instance, news that the pound sterling plunged to a 35-year low against the US dollar on 18 March 2020 (£1 = US$1.17), and reports of WTI oil prices moved into negative territory for the first time in history on 20 April 2020 - it traded as low as -US$40.32 (-£32.41) per barrel - are exemplary of early economic volatility caused by the pandemic, in turn causing confidence to deteriorate. In 2020-21, and in tandem with both lacklustre readings for key metrics of economic performance (e.g., rising unemployment, pressured incomes) and the imposition of public health restrictions limiting consumer and business activity, the CCI declined by 10% year on year, falling to 82.1 points and a level not seen since the financial crisis era.The government's four-step roadmap routing the exit from the third nationwide lockdown ended on 19 July, with all domestic restrictions being lifted. Meanwhile, the vaccination programme is progressing. As of July 2021, the UK has vaccinated more of its population than any other country in Europe, with the exception of Malta, and 48.3 million first doses and 43.6 million second doses have been administered as of 8 September 2021. However, approximately seven million patients in England did not come forward for treatment during the pandemic, resulting in 5.5 million NHS patients waiting for treatment and subsequently an increase in average waiting time of up to a 40%. Public perception on the state of the NHS is critical for public health and permeates into consumer confidence.Heading deeper into 2021-22, an accelerated vaccination programme, the reopening of the economy, and hopes of budding economic recovery all raised indicative prospects among consumer groups. The CCI rebounded by 12.5% on an annual basis. However, the UK consumer market remained in a state of net pessimism – as the CCI posted an average of 92.4-point reading in 2021-22 – as concerns continued regarding the potential for further adversity, if the pandemic evolves going forward. Moreover, the phasing out of government funding schemes and other artificial support during the pandemic, such as the Coronavirus Job Retention Scheme which ceased on 30 September 2021, likely yielding some pessimism.Over the year through March 2023, the UK's level of consumer confidence is declined by 3.4%, to an average CCI reading of 97.1-points. This is primarily due to the current volatility and uncertainty within the global and domestic economy. On the morning of 24 February 2022, President Vladimir Putin announced that Russia was initiating a "special military operation" in the Donbas region, and proceeded to launch a full-scale invasion into Ukraine. This then led to various economic and diplomatic sanctions from Western countries, including the UK, towards Russia. These sanctions have been met with threats from Russia and orders my President Putin to place Russian nuclear deterrent forces on high alert. While the global and domestic economic outcome of the Russian-Ukrainian war is uncertain at this stage, it is evident that this will be an influential variable towards consumer confidence. This is because consumers will be indirectly affected by the war and subsequently the economic sanctions, whether it be energy and consumer goods price rises, trade disruption, interest rate hikes and stock price volatility. In addition to the conflict within Ukraine, the UK economy is currently facing surging inflation, falling real disposable income, supply chain constraints and rising interest rates in order to combat inflation. All of which are likely to compound and weigh on the level of consumer confidence over the current year. In September 2022 the value of the pound against the dollar fell to £1=$1.0349 following the mini-budget announcement by the chancellor. The United Kingdom's annual inflation reached a four-decade high of 11.1% in October 2022 amid rising food and energy prices, the highest among G7 economies. In response the BoE has increased the base rate, reaching 3% in November 2022. Poor performance in GDP, including a decline of 0.6% in September 2022 have also contributed to recessionary fears.