The Index of Consumer Sentiment Quarter 4 2022

In Q4 2022, consumer sentiment has reached its lowest level since 2018, and seems to be on a continuing downward trend. All of us are more worried about our finances and the economy than we have ever been.

But we’re not all equally worried. Consumer sentiment is lower across the board, but the gaps between different types of people are widening.

With four years’ worth of data about consumer sentiment in the UK, the Index of Consumer Sentiment is proving its value as an indicator of how customers are feeling, and therefore how they’re likely to behave.

Download the latest white paper to explore the findings in more detail.

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Consumer sentiment at an all time low

After a near-record fall at the beginning of 2022, the Index of Consumer Sentiment has continued its decline, as consumers remain pessimistic about the economic outlook for the UK.

The latest score, 55.3 for Q4 2022, is a record low. While financial experts may forecast that inflation is soon set to ease, that confidence has not yet fed through to consumers, and therefore to their spending behaviour.

The key findings

  • The Index for Consumer Sentiment has fallen 2 points to 55.3

  • This is the lowest score we have ever seen (since the index started in Q4 2018)

  • Consumers remain deeply worried about the economy and their own financial position

  • US consumer sentiment, unlike the UK, has increased between Q3 and Q4 2022, both remain extremely low

  • EU consumer sentiment is higher, but also trending down

  • Debt position is more important than income

  • Consumers respond to rising prices by reducing spending where they can, notably in energy use

  • Men remain more positive than women

  • Customers over 45 are less optimistic, and the gap is widening

TLF Research founder, Nigel Hill, had the following to say in his foreward:

It’s important to recognise that, even if they are not perfect, customer attitudes are rooted firmly in reality. As this report shows, consumer perceptions about price rises accurately reflect the reality of inflation.

Similarly, consumers’ behavioural reaction to these price rises is perfectly sensible and rational—they have taken steps to reduce their spending in these areas, notably when it comes to energy usage.

Indicators such as the Index of Consumer Sentiment are the missing piece of the puzzle, the part that joins together the objective fact of price inflation with the measurable behavioural outcomes of spending data.

Download the full report now and let us know if you have any questions.

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