Consumer confidence in the UK has climbed to its highest level in four months this December, indicating a more optimistic outlook among households regarding their finances, according to a survey released on Friday. This news is a welcome boost for Finance Minister Rachel Reeves, especially following recent indicators that showed a downturn in business sentiment post-budget.
The GfK monthly consumer confidence index increased to -17 in December, up from -18 in November, marking the best reading since August.
Additionally, GfK’s measurements of both past and future financial confidence also reached four-month highs. Meanwhile, other components such as economic confidence and intentions for major purchases remained stable.
These figures suggest that consumers are generally optimistic about their financial situations, contrasting with a significant decline in business confidence following Reeves’ budget announcement on October 30, which included substantial tax increases for employers.
A separate survey by YouGov/Cebr, published Wednesday, indicated a slight uptick in consumer confidence this month, despite concerns about job security.
Neil Bellamy, consumer insights director at NIQ GfK, noted that while consumer sentiment has improved, there is still hesitation around making large purchases. He emphasized that confidence in the broader economy remains weaker compared to individuals’ financial situations.
“We will need to see significant improvements in perceptions of the economy before we can discuss lasting enhancements in consumer sentiment,” Bellamy stated.
Most analysts predict that Reeves’ budget will lead to a temporary boost in the UK’s economic growth next year, although recent data, including retail sales figures, has been underwhelming. Gross domestic product data for October is expected to be released at 0700 GMT.
The GfK survey involved 2,015 participants and was conducted from November 28 to December 9.
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