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UK consumer confidence jumps by most in eight years on vaccine news - GfK

·2-min read
Shoppers ride the escalators during the Boxing Day sales at Selfridges in London

LONDON (Reuters) - A gauge of confidence among British consumers jumped by the most in eight years in December, boosted by the launch of the country's coronavirus vaccine programme, a survey showed on Friday.

The consumer confidence index from market research firm GfK rose to -26 from -33 in November.

A Reuters poll of economists had pointed to a much smaller improvement to -31.

"Consumers are looking for good news and they have found it in the form of the UK's COVID-19 vaccination programme getting underway, which has lifted the mood pre-Christmas 2020," Joe Staton, GfK's client strategy director, said.

The last time the index jumped by more than seven points was between October and November 2012.

The increase took the index to its highest level since September, before a second wave of COVID-19 infections led to new restrictions on social gatherings and business.

Views among consumers about the outlook for the economy improved by 15 points, the biggest jump since 2011.

Household spending accounts for nearly two thirds of the British economy which is on course for its biggest contraction this year in more than three centuries.

The Bank of England said on Thursday that Britain's economy was likely to shrink by just over 1% in the fourth quarter, less than its projection in November for a 2% contraction. But the latest coronavirus restrictions were tighter than it had thought, so a recovery in the first three months of 2021 may be weaker than expected.

GfK said a six-point improvement in a measure of consumers' willingness to make major purchases was good news for retailers, many of whom have had to close their premises in the latest regional COVID-19 restrictions.

(Reporting by William Schomberg, editing by Andy Bruce)