Ongoing cost of living worries persist, but confidence among UK consumers saw an end-of year boost, according to GfK.
The market research company’s long-running Consumer Confidence Barometer is still in negative territory, but its headline score increased six points to -24 in November. This compares to -30 last month and -44 a year ago.
The headline score combines five key measures, including consumers thoughts on their current and future personal finance situation, the current and future wider economy and their view on whether now is a good time to make a major purchase.
All of these five measures were up in November compared to October.
Personal finances improve
The index measuring changes in consumer’s personal finances during the last year is up three points since October and eight points over the last 12 months, at -16. Consumers’ opinion on their own financial position over the next year is also improving. It rose by five points over the last month and 26 points in the last year to reach -3.
People are also feeling more bullish about the economy, according to GfK. Its index measuring the general economic situation during the last 12 months is up five points at -49; this is 18 points higher than in November 2022.
Expectations for the economy over the next year increased by six points to -26; this is 32 points better than November 2022.
The boost in consumer confidence comes as inflation fell to a two-year low of 4.6% last week, and is predicted to fall further.
Joe Staton, client strategy director at GfK, said: “Consumer confidence strengthened in November with improvements across all measures. Recent ups and downs in confidence have underlined the nation’s topsy-turvy economic mood as encouraging news about falling inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills. Although the Overall Index Score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation.”
Christmas boost for retailers
In addition, people are more likely to think now is a good time to make big purchases, said GfK. Its Major Purchase Index is up 10 points to -24, 14 points up on last year.
Staton added: “The dramatic 10-point jump in our major purchase sub-measure will be good news for retailers looking to benefit from Black Friday and Christmas. “Despite the acute cost-of-living pressures, many would still like to loosen their purse strings just a little so they can enjoy that feel-good factor we all associate with the festive season.”
The GfK Consumer Confidence Barometer has been running since 1974 and surveys 2,000 individuals each month.
