Strategic Finance
Glimmer of hope for consumer confidence |
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| Written by Catherine Murray | |
| Friday, 19 December 2008 | |
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UK consumer confidence has grown for the second month running, a survey shows.
The consumer confidence index from market research group GFK NOP rose by two points to -33 in December. This suggests that the recent cuts in VAT and interest rates and falling petrol prices are having a positive effect. The rise was led by some increased confidence in making major purchases, although this index is still considerably lower than this time last year.Rachel Joy at GNK NOP explains that this improvement suggests “high street deals and the small reduction in VAT have improved consumers views on this area”. The study said the major purchases sub-index jumped 10 points to -29, but still stands 15 points lower than this time last year. This survey comes after this week’s official figures showing a surprise increase in retail sales in November. Despite these improvements, however, consumer confidence does still remain near all-time lows. Confidence in the general economic situation over the next 12 months has fallen further as consumers tighten their belts and wait to see what 2009 holds. The sub index measuring how people think the economy will perform over the next year fell by five points, to -41. The survey also found that consumers are less likely to be able to save money than they were last month, in light of the poor optimism for next year. Joy comments, “UK Consumers have become even less confident about the future economic situation but, among these historically low levels of confidence, there is perhaps a glimmer of hope “The crucial question for the economy is whether the improvement in this index will be translated into activity on the high street during Christmas and the January sales,” she concludes.
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