Households felt more positive about their finances this month in a boost for High Street shops in the run up to Christmas.
A closely watched survey showed consumer confidence strengthened in November, pushing the pound to a 12-week high.
Britons were more optimistic about their budgets due to slowing inflation – which fell from 6.7 per cent to 4.8 per cent last month – and rising wages. It will come as a relief to retailers hoping for bumper sales in the weeks before Christmas, including Black Friday and Cyber Monday.
The consumer confidence score was negative overall but was up six points compared with October, the survey by GfK showed.
Shares in Next climbed 0.8 per cent, Marks & Spencer remained flat at 248.8p and B&M shares rose 1.7 per cent. ‘It is good to see that consumers are more optimistic about their personal financial situation’, said Joe Straton, client strategy director at market research company GfK.
Boost: A closely watched survey showed consumer confidence strengthened in November, pushing the pound to a 12-week high
‘This shows people are thinking about their future with increased confidence and willingness to look beyond the short-term.’
He added it is ‘good news for retailers looking to benefit from Black Friday and Christmas’.
The research tracked how consumers felt about their personal finances and the general economic situation over the last 12 months and the coming year. All of the five measures had risen in comparison to last month’s reading.
The overall index score improved from -30 in October to -24 in November. It was 20 points higher than the -44 recorded this time last year.
‘Despite the acute cost-of-living pressures, many would still like to loosen their purse strings just a little so they can enjoy that feel-good factor we all associate with the festive season,’ Straton said.
The rebound beat expectations of a score of -28, according to Gabriella Dickens, senior UK economist at consultancy Pantheon Macroeconomics.
She said: ‘We expect confidence will continue to strengthen, as real disposable income picks up, supported by a further period of catch-up growth in real wages and an easing drag from mortgage refinancing.’ The data added to expectations that interest rates will be held at a 15-year high of 5.25 per cent for longer.
Investors now think the Bank of England will make its first cut in September, rather than June as previously forecast.
The Bank of England’s chief economist Huw Pill, pictured, warned yesterday it cannot loosen monetary policy yet.
Energy, food and international goods prices have dropped but service price inflation and pay growth have remained ‘stubbornly’ high, Pill told the Financial Times.He said the challenge for the bank is to bring down those components of inflation.
