Despite lingering cost-of-living pressures, GfK’s headline consumer confidence index was stronger than expected in November, rising to -24 from October’s three-month low of -30
British consumers have turned more hopeful about the outlook for the economy and their personal finances this month but their mood remains a long way off pre-COVID levels, according to market research firm GfK on Friday.
In spite of lingering cost-of-living pressures, GfK’s headline consumer confidence index was stronger than expected in November, rising to -24 from October’s three-month low of -30.
November’s reading was above the -28 forecast in a Reuters poll of economists, and follows a sharp decline the month prior.
The six-point rise was the largest month-on-month improvement since March to April although Friday’s reading was still much weaker than just before the pandemic hit Britain.
Recent ups and downs in confidence have marked the nation’s topsy-turvy economic mood as encouraging news about decreasing inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills, said Joe Staton, GfK’s client strategy director.
Britain’s economy has suffered stagnating growth but GfK’s measure of how consumers view the economy in the 12 months ahead rose to -26 from -32 in October while feelings about the outlook for their personal finances increased by five points to -3.
The BoE, which has held interest rates at 5.25 per cent at its last two meetings after 14 successive hikes, is closely monitoring upside risks to inflation. Financial markets are almost certain rates have peaked, but Governor Andrew Bailey last week said it was “too early” to think about rate cuts.
While British consumer price inflation dropped considerably from a 41-year high of 11.1 per cent just more than a year ago to 4.6 per cent in October, households are still struggling with the highest inflation rate among major rich economies.
Britain’s official budget forecasters cautioned on Wednesday inflation would be more persistent than anticipated and living standards would be 3.5 per cent lower in the 2024/25 financial year than before the pandemic, despite finance minister Jeremy Hunt’s measures to bolster the country’s economy.
According to official data published last week, shoppers spent less in October as finances remain stretched.