UK Headlines: Consumer Confidence & Banking Reform — Jan 23, 2026
UK consumer morale inches up despite economic worries, GfK says
‘I don’t like banks very much’: Farage defends plan to end BoE payments on reserves
Most mortgage lending now covered by Financial Abuse Code
UK consumer confidence marks 10 years without a positive reading
Article 1: UK Consumer Confidence Edges Up But Economic Worries Persist
London, UK – January 23, 2026 — British consumer morale showed modest improvement this month, but economic sentiment remains fragile as households continue to grapple with persistent financial concerns.
Market research firm GfK reported on Friday that the UK consumer confidence index climbed to -16 in January, a small one-point increase from December’s reading. While this marks the highest level in more than a year, the overall score still reflects significant caution among British households about the broader economy.
The GfK index compiles several measures of how consumers feel about their personal finances, the national economy, and purchasing intentions. In the latest survey of 2,002 people conducted through mid-January, the indicator for expected personal finances over the next year improved notably to +6, suggesting households may feel slightly more secure in their own economic prospects. However, confidence in the broader UK economic outlook dipped to -31, indicating lingering pessimism over the larger national context.
Analysts said the figures reflect a mixed picture: while some families are beginning to feel relief from recent interest rate stability and modest wage gains, inflation that edged back up at the end of 2025 and slower-than-expected growth continue to weigh on public sentiment. Many consumers appear to be focusing more on managing day-to-day household finances rather than broader economic optimism.
Economists note that the UK has not seen a positive consumer confidence reading in more than a decade, a trend tied to the long-term aftereffects of the COVID-19 pandemic, political volatility, and ongoing cost-of-living pressures. Despite the slight uptick this month, the index’s continued negative territory underscores the challenges facing policymakers seeking to bolster household spending and support economic growth.
In response, consumer groups have called for targeted measures to ease cost pressures, including energy bill support and wage-growth initiatives. Business leaders welcomed the marginal improvement but stressed that sustained confidence recovery will likely require more durable economic stability and clearer signals from the Bank of England on interest rate expectations.
Article 2: Calls Grow for Bank of England Reform as Farage Targets Reserve Payments
London, UK – January 23, 2026 — Reform UK leader Nigel Farage has intensified his party’s campaign to overhaul the Bank of England’s monetary policy framework, setting out controversial plans to remove interest payments on reserves held by commercial banks. The announcement puts financial reform squarely into the spotlight ahead of an election year.
Farage argues that Bank of England (BoE) payments on reserves — a policy introduced as part of post-2008 quantitative easing operations — unfairly benefit big banks and contribute to rising wealth inequality. He claims eliminating these payments would encourage banks to lend more efficiently and reduce the perception of an entrenched financial elite.
“The current system subsidises banks at a time when many families are still struggling with cost-of-living pressures,” Farage said in a speech on Friday. “Ending these interest payments could help restore fairness and accountability in our financial system.”
However, the BoE — led by Governor Andrew Bailey — has warned that scrapping reserve payments could jeopardise financial stability, potentially driving volatility in credit markets and complicating efforts to meet inflation targets. Under current arrangements, the Bank earns less on the bonds purchased during quantitative easing than it pays out on reserves, resulting in operational losses that are covered under longstanding agreements.
Farage’s stance comes amid broader scrutiny of the UK’s banking and financial regulatory environment, including growing public concern about mortgage access and financial exploitation. In separate developments, the Financial Abuse Code, adopted by UK Finance and endorsed by major banking institutions, now covers most mortgage lending to better protect borrowers against abusive or coercive practices, marking a step toward strengthening consumer protections in the housing market.
Critics of Farage’s proposal — including economists from across the political spectrum — caution that radical alterations to central bank mechanics might unsettle markets during a period of already subdued growth and fragile investor confidence. They emphasise that the Bank of England plays a critical role in maintaining price stability and managing inflation expectations, and that tinkering with its established tools could produce unintended consequences.
Nonetheless, the debate has struck a chord with a swath of voters frustrated by stagnant wage growth and what they perceive as an unresponsive financial establishment. As the next general election approaches, calls for greater transparency and reforms in economic governance are likely to intensify across Westminster and beyond.
