In a surprising turn of events, consumer confidence in the UK received a boost in November, bringing potential good news for retailers as they gear up for the Christmas rush. According to data from GfK, the Consumer Confidence Index saw a six-point increase, reversing the nine-point dip experienced in October. Although the overall reading still remains in negative territory at -24, all five measures in the report showed improvement compared to the previous month.

One of the key indicators that saw an improvement was the index measuring changes in personal finances over the last year, which rose by three points to -16. This is a significant improvement compared to November 2022. Additionally, the forecast for personal finances in the next 12 months increased by five points to -3, indicating a 26-point increase from the same time last year.

The measure for the general economic situation of the country over the past 12 months also saw a positive change, increasing by five points to -49, which is 18 points higher than November 2022. Furthermore, expectations for the general economic situation in the next 12 months increased by six points to -26, showing a 32-point improvement from last year.

The major purchase index, which indicates the willingness of consumers to make significant purchases, saw a notable increase of 10 points to -24, which is 14 points higher than the previous year. Additionally, the savings index increased by four points to +29, suggesting a greater inclination to save compared to the previous year.

Joe Staton, Client Strategy Director at GfK, provided insights on the findings and pointed out that the fluctuating consumer confidence reflects the volatile economic climate. While falling inflation and wage growth offer encouraging news, the burden of high personal taxation and costly fuel and energy bills offset these positives. However, Staton mentioned that consumers are showing increased optimism about their personal financial situation, which indicates a willingness to look beyond the short term and plan for the future.

Staton also highlighted the positive impact of the 10-point increase in the major purchase sub-measure, partially undoing the worrying 14-point drop seen the previous month. This boost in consumer confidence is expected to benefit retailers during Black Friday and the Christmas season. Despite the pressures of the cost of living, many consumers are still willing to spend a little more to enjoy the festive atmosphere associated with this time of year.

Overall, the increase in consumer confidence in the UK in November provides a glimmer of hope for retailers as they navigate the holiday season. While challenges remain, the willingness of consumers to plan for the future and make significant purchases suggests a potential boost in sales for retailers.

Helpful links:
BBC: UK consumer confidence receives surprise boost in November
GfK: UK Consumer Confidence Summary November 2021