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Consumer confidence at near historic low despite slight increase

Consumer confidence rose slightly in November in a probable “collective sigh of relief” after the chaos of the mini budget but remains at a near historic low.

GfK’s long-running Consumer Confidence Index increased three points to minus 44 with improvements across all measures registering the financial and economic mood of the nation.

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

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

The major purchase index, reflecting confidence in buying big ticket items, also rose three points but is still 35 points lower than last November.

Joe Staton, client strategy director at GfK, said: “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.

“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.

“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.”

Linda Ellett, KPMG’s UK head of retail and leisure consumer markets, said: “Whilst rising taxes will further restrict household spending power, consumers will be hoping that this quickly helps to curb rising costs across the economy, especially on the essentials.

“As sale season begins, the World Cup kicks off and Christmas nears, retail and leisure businesses will be hoping for a feel-good factor that at least temporarily boosts spending, despite the increasing difficulty, or reluctance, of some consumers to spend.”