Hopes of a positive festive season for UK retailers were boosted today (Friday) with the announcement of the GfK Consumer Confidence Index, as it reached an 18-month high.
The GfK index tracking consumer sentiment climbed eight points this month to a reading of -22, an 18-month high and the seventh highest increase since the index began in 1974. The survey has averaged a reading of -29 this year and was at -30 in October.
The unexpected rise in confidence boosted hopes that consumer spending will hold up during the festive season and make a positive contribution to growth for the quarter as a whole.
“This is an unexpected rise in consumer confidence and comes despite uninspiring economic news recently. The improvement is especially dramatic following such a stagnant summer and represents the seventh highest increase since the Index began in 1974,” Nick Moon, Managing Director of Social Research at GfK, commented.
“The improvement in consumer confidence will be especially welcomed by retailers as the figures show that people are increasingly optimistic about how the economy will perform over the next twelve months. This could be because consumers now think things can’t get any worse or it may be for more positive reasons, but either way it is good news as we look ahead to 2013.
“The direction things head in the New Year will be crucial in determining whether this is a short-term spike or the start of a long-term improvement in people’s spending habits. When we saw a significant improvement like this in May 2011 the surge ebbed away over the following few months as the country returned to recession. Hopefully this spike is built on firmer foundations.”