UK consumer confidence hovers near record low: ‘Good news remains in short supply’

UK consumer confidence NUSA DUA, INDONESIA - NOVEMBER 16: British Prime Minister Rishi Sunak arrives ahead of an emergency meeting of leaders at the G20 summit following the overnight missile strike by a Russian-made rocket on Poland, on November 16, 2022 in Nusa Dua, Indonesia. The G20 meetings are being held in Bali from November 15-16. (Photo by Leon Neal/Getty Images)
UK prime minister Rishi Sunak. UK consumer confidence in the general economic situation over the next 12 months improved by three points to -58, but remained 35 points lower than this time last year. Photo: Leon Neal/Getty

UK consumer confidence saw a slight rise this month, but remained close to its record-low levels amid soaring inflation and a looming recession.

According to GfK’s monthly barometer, consumer confidence rose three points to -44 in November, up from -47 in October. This follows an all-time low of -49 in September.

All five of GfK's gauges of household economic and financial confidence improved during the period.

Confidence in the general economic situation over the next 12 months improved by three points to -58, but remained 35 points lower than this time last year.

Meanwhile, the forecast for personal finances over the next 12 months increased five points to -29, 31 points lower than a year ago.

The index surveyed 2,000 people between 1 November and 11 November. GfK said consumers remain under pressure from rising interest rates, taxes and rent payments.

Source: GfK
Source: GfK

The improvement is likely to reflect a sense of relief from the chaos of Kwasi Kwarteng’s mini-budget in September, which caused turmoil in the markets and sent the pound to its lowest level ever against the dollar.

“This month’s fillip is likely to reflect nothing more than a collective sigh of relief as a new prime minister takes charge following the alarming fiscal antics we saw in September,” Joe Staton, client strategy director at GfK, said.

“This is not the end of the beginning. External factors have changed little and, with UK inflation recently hitting a new high, more bad news is inevitable.”

Read more: FTSE rises as traders digest autumn budget aftermath

He added: “Household budgets remain shrouded in massive uncertainty with fresh jumps in food prices, energy still uncomfortably expensive, the prospect of new interest rate rises pressurising mortgage and rent payments, potential future hikes in council tax and squeezed real pay.

“Consumers are looking for a festive cocktail of certainty and optimism not this mishmash of austerity and pessimism. Good news remains in short supply as many people struggle to manage the purse-strings during this protracted and painful cost-of-living crisis.”

It comes as UK inflation hit 11.1% in the year to October, a 41-year high, and as retail sales in the UK remained 0.6% below their pre-pandemic levels.

According to the Office for National Statistics (ONS) on Friday, excluding fuel sales, the volume of goods sold in shops and online rose by 0.6% during the month, driven by clothing which was up 2.5%.

Sales volumes at shops across Britain shrank by 2.4% over the last three months. Food store sales volumes fell by 1%, with shopping baskets getting smaller, and were 4.1% below their pre-COVID levels of February 2020 — as some people were unable to afford as much.

Watch: How to save money on a low income