Consumer confidence grew in November despite increased concerns of sky-high inflation rates.

Shopping centre with Christmas displays

Overall, consumer confidence rose 3 points to -14 compared with October, according to the latest data from the GfK consumer confidence barometer.

This was largely driven by an increase in consumer sentiment on the general economic situation over the past 12 months – this measure jumped 6 points to -40, which is 27 points higher than the same month in 2020.

Expectations for the general economic situation over the next 12 months also grew 3 points to -23, which was again 27 points higher than in November 2020 in the second lockdown.

 

Consumers were less confident in their personal finances over the past year, dropping two points to -7, but this was still nine points higher than the same month last year.

They expressed fewer concerns over their personal finances for the year ahead, up one point to +2, seven points higher than last year.

This is good news for retailers, who will also be buoyed by the seven-point increase in the major purchase index to -3 – indicating that consumers are gearing up for big spending on Black Friday and in the lead up to Christmas.

GfK client strategy director Joe Staton 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, but consumers are 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.

“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.”