UK consumer confidence nudges higher as political turmoil eases

UK consumer confidence nudged higher in November, a closely-watched survey showed on Friday.

GfK’s Consumer Confidence Index rose 3 points in November to -44, although it remains close to historic lows. In September the index touched -49, the lowest since the survey began in 1974.

Within November’s overall print, the personal finance situation index for the next 12 months increased 5 points to -29, while expectations for the economy in the coming year improved 3 points to -58. The Major Purchase Index was also ahead, up 3 points at -38.

But Joe Staton, client strategy director at GfK, said: "This month’s fillip is likely to reflect nothing more than a collective sigh of relief as a new prime minster takes charge following the alarming fiscal antics we saw in September.

"This is not the end of the beginning. External factors have changed little and with UK inflation recently hitting a new high, more bad news is inevitable.

"Household budgets remain shrouded in massive uncertainty, with fresh jumps in food prices, energy still uncomfortably expensive, the prospect of new interest rate rises pressurising mortgages and…squeezed real pay."

Victoria Scholar, head of investment at Interactive Investor, said: “Although the reading picked up slightly, it is still languishing near record lows as the cost of living crisis, squeezed household budgets and the recessionary environment weigh on sentiment.”

Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: “The pronounced weakness of consumer confidence – GfK’s measure remained well below its long-run average in November, despite edging up – suggests that households will continue to save a larger than usual fraction of the incomes, such that spending will fall broadly in line with incomes.”

GfK surveyed 2,000 individuals aged 16 and over between 1 and 11 November, before new chancellor Jeremy Hunt’s autumn statement on Thursday.