While studying the GDP per capita of the United Kingdom, it shows that the figure increased slightly from £37,033 in 2023 to £37,044 in 2024. Although the change is minimal, it still indicates a positive economic growth on paper. However, in real life, many people do not feel the effects of this growth. Instead, they report feeling poorer and more cautious about spending and choosing to buy only the essentials. This raises an interesting question: Why does GDP per capita increase while consumer sentiment remains low?
Although overall statistics show economic growth, public perception tells a different story. A new term has emerged to describe this phenomenon: “vibecession.” It refers to a disconnect between economic indicators and consumer sentiment, a situation where the economy is technically growing, but people feel like it is in a recession. This creates a ripple effect: when consumers lose confidence, they reduce spending and investment, which can slow down actual economic activity and make the economy worse off.
According to GfK’s Consumer Confidence Index, the UK’s consumer sentiment improved slightly from -20 points in February 2025 to -19 points in March 2025. Although this is an increase, the index remains in negative territory, reflecting ongoing pessimism. Additionally, data from the Office for National Statistics (ONS) shows that real disposable income only increased by 0.2% in the third quarter of 2024, compared to a 1.6% increase in the previous quarter. This suggests that household spending power has barely improved.
Moreover, the cost of living continues to burden households. For example, food prices in early 2025 were still 6.8% higher than the previous year. Even with slight increases in income or GDP per capita, real purchasing power remains weak. People feel like they are spending more but getting less so, this is a key reason why they do not feel better off.
This situation illustrates the limitations of using GDP per capita as the sole measure of economic well-being. While it gives a general sense of economic performance, it does not account for income inequality, inflation, or the distribution of wealth. If economic growth benefits only a small segment of society, the average citizen may feel excluded from the so-called recovery.
To restore public confidence and ensure genuine progress, it is not enough for GDP to rise. However, the gains must be inclusive and felt across all income groups. Policymakers should also focus on improving wage growth, stabilizing the cost of living, and addressing structural inequalities. Otherwise, “growth” will remain a number on a chart but not a reality in people’s lives.