Consumer optimism improves in January despite spending drop

Consumer confidence in the wider economy improved to -32 in January, rising from -38 in December, according to the latest data from the BRC-Opinium index. 

The index shows a monthly improvement in economic outlook despite a sharp decline in retail spending plans, as personal financial expectations rose to -8 from a previous -10. 

Retail spending expectations fell to -6 in January, a significant drop from the +6 recorded in December. Overall personal spending expectations also declined to +5 from +17, while personal saving rose to +2 from -9.

The decline in spending intentions was most prominent among Millennial and Gen X demographics. These groups are identified as the generations most likely to have children living at home during the post-festive period.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The new year brought hints of optimism, with the second consecutive improvement in consumer confidence in the economy and in people’s own finances. This was the highest in five months, though similar to a year earlier.

“January’s renewed optimism is encouraging, but shows just how important it is for the government to build momentum and restore confidence to the levels seen in previous years. With wages still struggling to keep pace with higher costs of living, many people feel as though neither their own finances nor the wider economy is moving forward.”

She added: “And if business costs continue to accelerate through 2026 – from rising business rates to new regulatory burdens – then the risk is clear: inflation remains stubbornly high, and consumer confidence could falter once again.”