Consumer confidence dipped in February but people are more confident about their personal finances over the next 12 months compared to last year, a closely-monitored survey says.

GfK’s long-running Consumer Confidence Index fell two points to -21 in February, as concerns over the economy persist.

The UK economy entered a downturn at the end of 2023, according to official figures. 

But this week the Bank of England’s governor Andrew Bailey said the UK recession might already be over and there are now “distinct signs of an upturn”.

Within the survey, which has been running since 1974, the measure of the general economic situation of the country during the last 12 months was down two points to -4 and the expectations for the general economic situation over the next 12 months decreased by three points to -24.

The Major Purchase Index, a measure of how likely consumers are to buy higher value goods and services, meanwhile, was down five points to -25.

The index measuring changes in personal finances during the last year is down two points at -14 but the forecast for personal finances over the next 12 months held steady month-on-month at 0, which is 18 points higher than last year.

Meanwhile, the Savings Index increased two points to +29 in February.

Joe Staton, client strategy director GfK, said: “There’s a mixture of bad news and good news for February. The bad news is that the improvement in the Overall Index Score seen over recent months stalled slightly in February due to a fall across most measures. 

“However, the good news is that optimism for our personal financial situation for the next 12 months has not slipped back. Although registering again at zero, this is a significant improvement on the -18 score from February last year. 

“This metric is key to understanding the financial mood of the nation because confident householders are more likely to spend despite the cost-of-living crisis.

"Looking forward, it will be interesting to see what the forthcoming Budget delivers in terms of taxation and inflation. These are important issues to everyone – especially in an election year. 

“The recent performance of the economy will play a crucial role in determining results at the ballot box. All the measures this February are better than a year ago, but consumer confidence alone will not carry us into a brighter economic future.”