Consumer confidence rises ahead of Black Friday

November's improvement was driven by a jump in intentions to make major purchases. Credit: PA

Consumer confidence improved in November amid signs shoppers are ready to put political upheaval behind them to spend ahead of Black Friday and Christmas.

Growth from Knowledge’s (GfK) long-running consumer confidence index rose by three points this month, although it remains firmly in negative territory at minus 18.

The index is calculated based on monthly surveys from a sample of consumers and measures people's opinions on a range of economic factors. These include general economic outlook, household finances, saving intentions and openness to spend money on big-ticket items.

During times when consumers feel more financially stable, this naturally influences their spending patterns.

November's improvement was driven by a jump in intentions to make major purchases by five points to minus 16, which shows increased confidence in buying big-ticket items.

With Black Friday next week and Christmas not far around the corner, this figure is eight points higher than the same time last year.

Confidence in personal finances for the year ahead rose by one point to minus one – two points higher than this time last year.

Expectations for the general economic situation are up two points, but remain at minus 26.

Neil Bellamy, GfK consumer insights director, said: “There was evidence of nervousness in recent months as consumers contemplated the potentially worrying impact of the UK Budget at home and even the implications of the US presidential election, but we have moved past those events now."

However, Bellamy warns that it is still “too early to expect significant further improvements in the consumer mood", adding that "people are still feeling acute cost-of-living pressures, and it will take time for the UK’s new government to deliver on its promise of ‘change’".

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Linda Ellett, UK head of consumer, retail and leisure markets at KPMG said that while consumer confidence continues to be variable, ability to spend does depend on household circumstances.

She adds: “Inflation, interest rates having not yet sufficiently fallen and a toughening labour market are all weighing on the minds of many people.

“Early indications are positive on the impact the Black Friday and Cyber Monday period could have but how this month proceeds is the first test of consumer spending appetite following the Budget.

“Retailers will be hoping for a release of pent-up spending demand, including on Christmas gifts, as we head into the golden quarter for the sector.”

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