Consumer Confidence Takes Unexpected Downturn in February
Consumer confidence has experienced a concerning setback, according to newly released research, delivering another blow to Labour's economic strategy. The closely-monitored GfK survey revealed that consumer confidence slipped by three points to -19 in February, reversing recent modest improvements and returning to levels last seen in November 2025.
Personal Finances Drive the Decline
The survey found British consumers have grown significantly more negative about their personal financial situations. Both retrospective assessments of the past twelve months and forward-looking expectations for the coming year dropped by four points each. Fewer people now believe it's a good time to make major purchases, and intentions to save money have also diminished among the surveyed population.
Neil Bellamy, consumer insights director at GfK, explained the troubling trend: "This decline is mainly driven by weaker perceptions of personal finances — both looking back a year and ahead. Although the rate of inflation is easing, prices continue to rise, forcing many households to prioritise day-to-day spending over longer-term needs."
Broader Economic Sentiment Remains Negative
While sentiment about the general economic situation over the past year showed a marginal one-point improvement from January, views on the economy's prospects for the next twelve months remained unchanged and firmly in negative territory. Consumers are anticipating only limited economic growth this year, according to Bellamy's analysis, creating a challenging environment for government campaigns centered on tackling the cost of living.
Household Costs Compound the Problem
The GfK findings arrived just one day after the Office for National Statistics revealed household costs jumped significantly throughout 2025. Overall costs rose by 3.6 percent over the year, with price changes affecting both low-income and high-income households similarly. The data showed several concerning patterns:
- Households with working members experienced higher cost increases than retired households
- Costs for households with children grew at a faster pace
- Private renters emerged as the worst-affected group nationwide
- Outright owner-occupiers benefited from relatively smaller cost rises
Savings Index Reflects Broader Economic Pressures
The GfK savings index also dropped during February, likely reflecting consumer responses to banks cutting interest rates following the Bank of England's series of borrowing cost reductions over the past year. This combination of factors — weakening personal finance perceptions, persistent price increases despite easing inflation, and diminished savings intentions — creates a complex economic landscape that will likely worry Labour strategists as they attempt to build confidence in their economic management.
The February setback in consumer confidence represents more than just statistical fluctuation; it signals growing public anxiety about financial stability amid ongoing cost pressures, potentially undermining government efforts to demonstrate economic progress ahead of future electoral challenges.
