Why is consumer confidence a focus for the FCA?

Consumer confidence is a key focus for the FCA because it directly influences market performance. When consumers have confidence in the financial system, they are more likely to engage in economic activities such as saving, investing, and spending. This activity not only drives growth in the economy but also stabilizes financial markets, as trusted consumers are more likely to participate in transactions.

Higher levels of consumer confidence can lead to increased demand for financial products and services, which can enhance the overall health of the financial sector. Conversely, low consumer confidence can trigger market volatility, reduced spending, and a decline in economic growth. Therefore, monitoring and fostering consumer confidence is crucial for regulatory bodies like the FCA to ensure a stable financial environment that benefits both consumers and the economy at large.