UK consumer confidence has bounced back despite the ongoing cost-of-living concerns as consumers look set to “loosen their purse strings” and enjoy the festive season.
GfK’s long-running Consumer Confidence Index rose by six points in November, although it still languishes firmly at minus 24.
Confidence in the general economy over the next 12 months also increased by six points to minus 26, which is 32 points higher than a year ago.
The forecast for personal finances over the coming year increased five points to minus three, which is 26 points higher than last November.
The major purchase index, a measure of confidence in buying big ticket items, saw a dramatic 10-point jump to minus 24, reversing some of last month’s 14-point drop in what will be good news for retailers looking to benefit from Black Friday and Christmas.
GfK client strategy director Joe Staton 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 score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation. This shows people are thinking about their future with increased confidence and willingness to look beyond the short term.
“Despite the acute cost-of-living pressures, many would still like to loosen their purse strings just a little so they can enjoy that feelgood factor we all associate with the festive season.”
Linda Ellett, UK head of consumer retail and leisure for KPMG, said: “Four in 10 consumers that KPMG surveyed said that the higher cost of living will require them to spend less on Christmas gifts this year.
“Even those spending the same amount as last year may well find that it equates to less volume due to the impact of inflation.
“Retailers are competing for this shrinking spend, with over a third of consumers telling us they are spending more time now searching for the best-priced goods.
“Whether it be Black Friday, Christmas, or generally, consumers are watching prices and looking out for genuinely good promotions and discounts.”