Most consumers remain downbeat about the economic outlook

Despite some slight improvement in consumer confidence recorded at the start of 2023, most still remain downbeat about the economic outlook for the coming six months, with no real expectation of a let-up in the cost of living crisis.

Amid reports of slower house price growth and further ECB rate increases, the majority still expect the cost-of-living, cost of borrowing money, and the affordability of housing to fare worse.

Concerns about the outlook for the labour market remain heightened, with half expecting the employment situation to deteriorate and this no doubt has been influenced by some recent high profile job losses in the technology and retail sectors.

Just less than two-thirds also believe their discretionary disposable income will fall in the coming six months, most likely due to an expectation of increased costs as result of rising prices.

Despite that, there is an increase in consumers expecting to spend more on holidays, consumer goods and entertainment – again, this is likely to reflect higher costs associated with these things, rather than necessarily an increase in volume purchases.

Many consumers have already taken action and made changes to their spend groceries, frequency of socialising, streaming subscriptions, switching utility providers and newspaper / magazine subscriptions. There are also more people now planning to make changes to their mortgage and health insurance products (typically more complex products to change).

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Consumer Mood Monitor January 2023