UK consumer morale steady in November
British consumer morale held steady in November in the face of slipping confidence about the economy’s prospects over the next 12 months, a survey by polling company GfK showed.
The headline consumer confidence index hovered at -2 for a second month in a row, a shade weaker than the forecast of - 1 in a Reuters poll. Despite sluggishness seen in recent months after a sharp rise earlier in the year, it was still close to the nine-year high of +1 touched in August and June and households showed a strong appetite to make major purchases.
Nick Moon, GfK’s managing director for social research, said flat consumer morale could continue until May’s national election. “The government will be hoping to go into the general election on a rising tide ... but unless the public gets another burst of good economic news it’s hard to see this happening anytime soon,” Moon said. Official data on Wednesday showed that overall economic growth remained robust in the third quarter of 2014, driven mainly by consumer spending which rose 0.8 percent, its fastest quarterly rate in more than four years.
But the figures also increased concerns about the resilience of the economic recovery after an unexpected fall in British business investment. GfK’s study showed that consumers’ worries sharpened slightly with regard to both their personal finances and the general economic situation over the year to come.
But the number of people who thought now was the right time for major purchases, such as furniture or electronic goods, bounced back to September’s seven-year high. A separate survey by market research company YouGov and the Centre for Economics and Business Research, a forecasting firm, showed consumers’ expectations about their financial situation rose to its highest since February 2009, when Britain was in the depths of recession.
YouGov and CEBR linked the finding to signs of a pickup in earnings in official data. The GfK survey was conducted between Nov 1 and Nov 19 on behalf of the European Commission. — Reuters