Consumer confidence edges up despite inflation woes

Consumer confidence crept up in November as shoppers put aside concerns about soaring inflation to spend in the run-up to Black Friday and Christmas, figures show.

GfK’s long-running Consumer Confidence Index increased three points to minus 14 in November following a three-month downturn.

A seven-point jump in the survey’s major purchase index – an indicator of confidence in buying big ticket items – comes amid decade-high inflation and deepening concern over rising interest rates and will be a relief for retailers as they head into the all-important Christmas season.

Consumers’ view of the general economic situation over the past year and the 12 months ahead also ticked up, by six points and three points respectively.

However confidence in personal finances is less robust, dropping two points to minus seven, while the forecast for the next 12 months increased one point to positive two.

GfK Client Strategy Director, Joe Staton, 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.

“The view on the general economic situation over the past year and year to come is better this month but consumers are less buoyant on their personal finances. This weakness is important as it reflects day-to-day plans to save or spend and is a strong driver of overall UK economic growth.

“However, one highlight for both physical and virtual retail is the seven-point jump in major purchase intentions in the run-up to Black Friday and Christmas. 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.”