UK consumer confidence edged up in November despite the rising cost of living but households’ view of their own finances remained weak, a survey showed.
The GfK consumer confidence index rose by three points to -14, reversing most of the four-point drop from the month before. Households were less gloomy about the general economic situation over the past 12 months and the coming year and were marginally more positive about their own finances for the coming year.
The score for personal finances over the next 12 months rose to 2 from 1 but was still well below the score of 5 in September. Households’ view of their finances over the past year dipped to -7 from -5.
GfK said the personal finances results were important because they reflected day-to-day spending plans and were an important indicator for the shape of the economy. However, with Black Friday and Christmas approaching, consumers are more willing to splash out on big items with the major purchase measure strengthening to -3 from -10.
Joe Staton, client strategy director GfK, said: “Headline consumer sentiment has ticked upwards this month despite decade-high inflation, fears of higher prices and worries over rising interest rates, and as the deepening cost-of-living squeeze leaves UK household finances worse off this winter.
“Is this a sign that shoppers are ready to bounce back, after last year’s cancelled family gatherings, with a Christmas splurge in coming weeks? That’s how it looks but consumers also know that when the festivities are over it’s going to be a tough year in 2022.”
Dire predictions about high unemployment have not yet been borne out but households face an uncertain future with inflation at more than 4% and tax rises due to take effect in April. Financial markets are also betting the Bank of England will raise interest rates from their record low at December’s monetary policy meeting.
The survey interviewed 2,000 people aged 16 and over between 1 November and 12 November.
