- Consumer confidence dips by -2.4 points in February 2022
- Household finance measures for the previous month (-9.2) and the year ahead (-19.3) see the worst scores in the near-ten-year history of the index
- House value metrics for the past 30 days (+3.7) and the next 12 months (+0.8) climb upwards for the third month in a row
- Business activity sees a five-point jump for the past 30 days, but outlook deteriorates (-3.5) to lowest levels since April 2021
The cost of living crisis has had a devastating impact on consumer confidence, according to the latest analysis from YouGov and the Centre for Economics and Business Research.
If last month saw the first whispers of discontent, this month the public are in much fuller voice: soaring energy bills have taken the overall index from 109.0 to 106.6 – a fall of -2.4 points, and one that can be significantly attributed to a catastrophic decline in household finance measures. While consumer confidence scores are still positive, they are propped up to an extent by stronger performance in the home value, job security, and retrospective business indices.
YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents answer questions about household finances, property prices, job security, and business activity, both over the past 30 days and looking ahead to the next 12 months.
Each month we ask Britons about whether their household finances have improved or worsened over the past 30 days, and whether they expect their household finances to improve or worsen over the next 12 months. With retrospective scores plummeting to 71.5 (-9.2), and outlook plunging to 59.7 (-19.3), both household finance measures saw the lowest scores in the near-decade-long history of the Consumer Confidence Index. As sanctions related to Russia’s invasion of Ukraine drive gas prices to record highs – and as April’s 54% increase to the energy price cap draws closer – these unprecedentedly negative attitudes could yet get worse.
But if households are more pessimistic about their finances than ever, homeowners are (for the fourth month in a row) feeling more buoyant. House price measures for the past month rose to 132.9 (+3.7), while outlook rose to 138.2 (+0.8). Among workers, retrospective (+1.2) and forward-looking (+2.2) perceptions of job security also trended upwards, reaching 94.5 and 118.6 respectively.
These employees may be feeling more secure in their positions thanks to a jump in business activity over the past 30 days: scores for this measure hit 113.9 – a five-point jump on the month before (+5.0), and one that follows two months of falling scores. But with outlook diminished to 123.6 (-3.5), they do not have the same levels of optimism when it comes to their employers’ prospects for the next 12 months.
Darren Yaxley, Head of Reputation Research at YouGov: “The cost of living crisis is having a serious impact on consumer confidence. Although the overall index remains positive, the dip in February is compounded by tumbling household finance measures with both retrospective and forward-looking scores at their lowest ever level since tracking began almost ten years ago. However, other measures give more cause for optimism – with both homeowner scores increasing for the fourth month in a row and job security metrics improving following two months of decline.”
Kay Neufeld, Head of Forecasting and Thought Leadership at Cebr: “February’s drop in the Consumer Confidence Index was mainly driven by precipitous declines in the measures tracking households’ financial situation. Against a backdrop of accelerating inflation and the upcoming increase in the energy price cap, households are understandably nervous about the outlook for their personal finances. Meanwhile, the war in Ukraine is likely to further add to spiralling energy costs, based on the turbulence in oil and gas markets in recent days following the imposition of Western sanctions on Russia.
“Gains in the job security measures and the backward looking business activity score indicate that the UK economy has started the year on a strong footing as the impact of Omicron has faded. However, the decline in expected business activity over the coming 12 months suggests that the energy crisis and the war in Ukraine could have a considerable negative effects on UK economic output this year.”
