December saw decreases in four measures; confidence in their personal financial situation over the last 12 months, confidence in their personal financial situation over the next 12 months, confidence in the "general economy" over the last 12 months and confidence in the "general economy" over the next 12 months. The "major purchase index" was the only measure increasing in December.
Nick Moon, MD of GfK NOP Social Research, comments: "At the moment consumer confidence is being propped up by one thing - a belief that the run-up to Christmas and the VAT hike is a good time for big-ticket retail purchases. This element of the index has distorted the overall index to make it appear static when in fact it is teetering on the brink. Every other measure has fallen and without this one positive, consumer confidence would have fallen to its lowest level in over a year. Of course, the real test will come in January when festive spending ceases and the VAT increase comes in. Then we will finally see the full impact of how consumers are reacting to the first wave of austerity measures."
The overall index score this month has stayed the same at -21, two points lower than this time last year. Four of the five measures this month decreased, with the remaining measure increasing by 10 points. The annual moving average stayed the same at -18.
The index measuring changes in personal finances during the last 12 months has decreased three points this month, at -16; this is two points lower than this time last year.
The forecast for personal finances over the next 12 months decreased one point to -8; this is 11 points lower than December '09.
The measure for the general economic situation of the country during the last 12 months has decreased by five points to -51; 10 points higher than this time last year.
An expectation for the general economic situation over the next 12 months has decreased by one point to -23, 17 points lower than December '09.
The major purchases measure has increased by 10 points to -7; 9 points higher than this time last year.
The 'now is a good time to save' Index, has decreased five points to -10, which is two points lower than December '09.
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