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Economy

UK Consumer Confidence improves in November despite high inflation

The Savings Index also weakened by seven points to +15 in November - this is four points higher than this time last year

UK consumer confidence improved by three points in November despite concerns over rising inflation, according to GfK’s Consumer Confidence Index.

GfK revealed that four of the index’s measures increased during the period, with a seven-point jump in the major purchase index indicating “good news” for retailers in the run-up to Black Friday and Christmas.

It also found that the measure for the general economic situation of the country during the last 12 months is six points better at -40; this is 27 points higher than in November 2020.

The Savings Index also weakened by seven points to +15 in November – this is four points higher than this time last year.

However, GfK did reveal that the index measuring changes in personal finances over the last 12 months has dropped two points to -7; which remains nine points better than November 2020.

Joe Staton, Client Strategy director at GfK, said: “Headline consumer sentiment has ticked upwards this month despite decade-high inflation, fears of higher prices and worries over rising interest rates, and as the deepening cost-of-living squeeze leaves UK household finances worse off this winter.

“The view on the general economic situation over the past year and year to come is better this month (up six points and three points respectively) but consumers are slightly less buoyant on their personal finances. This weakness is important as it reflects day-to-day plans to save or spend and is a strong driver of overall UK economic growth.”

He added: “However, one highlight for both physical and virtual retail is the seven-point jump in major purchase intentions in the run-up to Black Friday and Christmas.

“Is this a sign that shoppers are ready to bounce back, after last year’s cancelled family gatherings, with a Christmas splurge in coming weeks? That’s how it looks – but consumers also know that when the festivities are over it’s going to be a tough year in 2022.”

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