Consumer expectations about the UK economy and household finances improved for a second consecutive month in January, according to the latest BRC-Opinium consumer sentiment data – though anticipated spending dropped sharply as the festive season ended.
The survey found expectations for the state of the economy over the next three months improved to -32 in January, up from -38 in December. Views on personal finances also strengthened slightly to -8, from -10 the previous month.
However, consumers signalled a significant pullback in planned spending. Expectations for personal spending on retail fell to -6 in January, down from +6 in December, while overall personal spending dropped to +5, down from +17.
In contrast, expectations for personal saving rose to +2, up from -9, suggesting households are prioritising caution and rebuilding financial buffers after Christmas.
Helen Dickinson, chief executive of the British Retail Consortium, said the start of the year brought “hints of optimism”, with January marking the highest consumer confidence reading in five months.
But she warned the improvement remained fragile, with spending expectations falling sharply as shoppers tightened belts post-Christmas – a trend most strongly felt among Millennials and Gen X, who are more likely to have children living at home.
“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,” Dickinson said.
She added that with wages “still struggling to keep pace with higher costs of living”, many consumers feel neither their finances nor the wider economy are improving meaningfully.
Dickinson also cautioned that rising business costs through 2026 – including business rates increases and new regulatory burdens – could keep inflation higher for longer and undermine confidence again.