Consumer confidence levels improved marginally in November but still remain low as the Eurozone crisis and fears over a further recession continues to depress sentiment.
November’s consumer confidence data from market research body GfK shows a one point rise to -31, 10 points lower than confidence levels a year ago.
Confidence levels in recent months remain at the bottom end of the survey’s 37-year history and have only ever been lower during the banking crisis of 2008/09 and the downturn in the early 1990s.
The index measuring how consumers feel about their personal finance situation over the next 12 months remained at -10 in November. While this is flat on October, it is three points lower than November 2010.
The index measuring consumers’ propensity to spend on major purchases however has inreased five points in November to -27, although this is still 10 points lower than at this time last year.
Nick Moon, managing director of GfK NOP Social Research, said: “Given the current crisis over the Eurozone, and the pessimism in the media about the likelihood of the British economy sliding back into recession next year, the one point increase in the index this month is a minor variation and doesn’t indicate a significant change.
“While it does reverse the decline of last month, what matters is the long term trend, and at the moment that still looks very gloomy.”
Singer analyst Matthew McEachran said: “Despite this slight uptick, confidence levels remain at very depressed levels and have only been lower on two previous occasions in the survey’s 37 year history.
“The Eurozone crisis and the growing likelihood that the UK will slip back into recession are weighing on consumer’s minds, as they are on economists growth forecasts which was reflected in Osborne’s Autumn speech and response to it yesterday.”
Moon added: “The one bright sign, which will certainly be welcomed on the high street, is the increase in the proportion of British consumers that think now is a good time for a major purchase.”