UK consumer confidence rises as festive shopping season begins
A close survey conducted on Friday showed British consumers were feeling increasingly optimistic in December, heralding good news about their spending as the country enters the crucial festive shopping season.
Research group GfK’s consumer confidence index rose two points to minus 22 in December, continuing a rebound that began in November. That’s slightly below expectations for minus 21, according to economists polled by the Wall Street Journal ahead of the survey’s release.
GfK director of customer strategy Joe Staton pointed out that while the index remains in negative territory, consumers are clearly feeling more optimistic. High interest rates and rising prices are still eating away at disposable income, he said.
“Despite the severe cost-of-living crisis still affecting most households, the slow but sustained movement toward positive territory in personal finance measures is an encouraging sign for the year ahead,” Staton said.
“National confidence is still firmly in negative territory, (but) optimism about our personal finances over the next 12 months represents a notable recovery from the recession (levels) reported this time last year,” Staton said. In December 2022, the GfK barometer showed an even sharper minus reading of minus 42.
All five index components, which measure sentiment about personal and general financial conditions and confidence about making big purchases, recorded higher values in December. The positive mood among UK consumers will boost hopes for a boost in year-end sales at a critical time for UK retailers. Retail sales fell in October, according to the latest data released last month, but some economists expect shoppers to save money for the rest of the year.
An increase in consumer spending will provide a much-needed boost to the wider UK economy. Figures this week showed gross domestic product (GDP) fell more than expected in October, and some economists warn the economy could head into recession without a sharp recovery in the final months of the year and into 2024. A technical recession is usually defined as two consecutive quarters. Negative growth.
