UK consumer confidence creeps higher

UK consumer confidence edged higher in October, a closely-watched survey showed on Friday, although it remains at historic lows.

The latest GfK Consumer Confidence Index increased by two points to -47, after three measures rose, including both the personal financial situation and general economic situation for the next 12 months. They rose by 6 points to -34, and by 7 points to -61, respectively.

However, the overall index remains close to September’s historic low of -49, the weakest since the survey was launched in 1974. The major purchase index also fell, by 3 points to -41, and all measures remain at historic lows. The forecast for personal finances over the next 12 months, although up month-on-month, remains 35 points down on the same month a year previously.

Joe Staton, client strategy director at GfK, said: "All core measures remain severely depressed. The fall in the major purchase index continues a steep downward trend that began in July 2021, and is especially worrying for the final quarter of the year, which many businesses relay on to strengthen their balance sheets."

He added that the biggest danger "by far" was inflation. "Households are not just running scared of burgeoning energy and food prices, and the prospect of further base rate rises increasing mortgage costs. They are now facing the likelihood of tax rises and even austerity measures.

"For ordinary consumers, this web of uncertainty and turmoil amounts to a new abnormal," he said.

GfK surveyed 2,001 individuals aged 16 and over between 3 and 13 October. GfK noted that the start date was after September’s mini-budget while the end date was the day before then chancellor Kwasi Kwarteng was sacked.