Consumer confidence in the UK showed a slight improvement in November, despite concerns regarding high inflation and potential retail shortages. According to GfK, the consumer confidence index increased by three points, reaching -14 and reversing a downward trend over the past three months. This is encouraging news for retailers, as it suggests a potential increase in spending in anticipation of Black Friday and the upcoming holiday season. Nevertheless, Joe Staton, GfK’s Client Strategy Director, warns that consumers are mindful of the potential challenges that 2022 may bring.
One noteworthy point is that some consumers are feeling less optimistic about their personal finances. The index measuring changes in personal finances over the last year dipped by two points to -7. Despite this decline, it is still nine points higher compared to November 2020 when the impact of the pandemic was more prominent. As for the general economic situation of the country, there has been a six-point improvement in the index over the past year, reaching -40. This represents a notable 27-point increase compared to the same period last year. Expectations for the general economic situation over the next year also saw a three-point improvement, now standing at -23 and reflecting a significant 27-point increase from November 2020.
On the other hand, the savings index weakened in November, experiencing a seven-point decline to +15. However, it is still four points higher compared to the previous year.
In summary, the rise in consumer confidence suggests a potential recovery in spending as consumers gear up for the holiday season. Nevertheless, the caution expressed by GfK serves as a reminder that challenges may lie ahead in 2022. With concerns surrounding inflation and potential retail shortages, consumers may still approach their financial decisions with some level of reservation.
Useful links:
1. BBC: UK Consumer Confidence sees slight improvement in November
2. GfK: Consumer Confidence Index November 2021 Press Release
