Consumer confidence climbs thanks to ‘Boris bounce’

Consumer confidence climbed for the second straight month in January thanks to a small post-election “Boris bounce,” according to new data.

While the consumer confidence index rose by 2 points to –9 this month, the indicator remains firmly in negative territory, and the growth in confidence was slower than in December, market research firm GfK said.

The long-running index has been in negative territory for around four years.

Joe Staton of GfK suggested that the boost to confidence was sparked by Boris Johnson’s emphatic general election win in December.

“The first month of 2020 has given us a mini Boris bounce, with a two-point increase,” he said.

“While January marks four years of the index failing to penetrate positive territory, we now have two consecutive months of improvement.”

READ MORE: UK property sales on the rise in 'Boris bounce'

Other closely watched indicators have also pointed to a clear, if modest, rebound for the economy in the wake of the election result.

Purchasing managers’ index (PMI) data for January came in well ahead of expectations. Business optimism has also ticked up and there has been an improvement in the housing market.

The uptick in consumer confidence was “good news,” according to Staton.

“The latest measures concerning our personal financial situation for the last and next 12 months are encouragingly healthy and positive, as is the improvement in our view of the wider economic picture for the UK.”

A GfK measure of personal finance outlook also climbed to 1, from –3 in December. Consumers were even more positive about their expected personal finance situation over the next year, with that measure rising to 6, a jump of 3 points.

Staton said the jump was due to the rise in jobs and signs of improvement in the housing market, as well as slow price growth and moderately low interest rates.

READ MORE: Bank of England holds interest rates but slashes growth forecasts