Consumer confidence had been falling for the past three months in the United Kingdom and was predicted by Experts to fall down further. However, against the pessimistic expectations, the Consumer Confidence rose 3 points from minus 17 to minus 14 as per the GfK’s consumer confidence barometer.
The earlier predictions were based on a poll by the Wall Street Journal for the Economists. GfK’s client strategy’s director Joe Staton shared that, “Headline consumer sentiment has ticked upward this month [November] despite decade-high inflation, fears of higher prices and worries over rising interest rates, and as the deepening cost-of-living squeeze leaves U.K. household finances worse off this winter.”
There are 5 parameters on which the reading of the barometer is based, out of which 4 showed a positive sentiment, as compared to October. The analysis also came to the conclusion that consumers are now less optimistic about their personal finances, however, people believe that there is a certain betterment in the general economic situation.
“This weakness is important as it reflects day-to-day plans to save or spend and is a strong driver of overall U.K. economic growth,” Staton said. He appeared to be skeptical and believes that this statistic is short-lived. The rise of the headline index can be attributed to a major increase in the purchase index, which measures the demand for products amongst the shoppers.
It is foreseeable that this shall translate into healthy spending on Black Friday Sales, and Christmas Shopping. However, in a slightly more distant future, it is going to translate into a comparatively more crunch-driven 2022.
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The country’s economy will yet take a couple of months into the next year to recover from the shock imbued by the pandemic. The consumer prices have gone up 4.2% on the year just last month after it already rose 3.1% in September. This is the fastest that inflation has caught on in a decade, i.e. December 2011.
It is yet for the government to unveil more confidence-building measures, and ensure there is no gridlock between supply chains, to prevent the manufacturing industry from being targeted.
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