The Brief: Market research firm GfK reported that UK consumer sentiment has improved for two consecutive months after PM Rishi Sunak’s efforts to salvage the economy. Consumer confidence rose to -44 in November, up by 3 points from the previous month. However, GfK added that consumers are still pressured by rising interest rates, taxes and rent payments. The group’s consumer confidence survey recorded an all-time low in September when it slid to -49.
Why It Matters: More positive news was delivered by the Office for National Statistics (ONS) when it reported that UK retail sales made a slight rebound in October, increasing by +0.6% from the previous month's -1.5% drop.
Finanze Foresights: This somewhat positive data from GfK and ONS still reflect the gloomy economic outlook among the general population. As markets fluctuate too often, the trends reported becomes short-lived and cannot create a good indication of current sentiments. This does not discount the findings of GfK, however, since we’ve already observed how the financial markets started to stabilise when Sunak stepped into office. Yesterday’s Autumn Statement that proposed tax hikes and spending cuts will most likely dampen consumer outlook further. Small and medium enterprises are the first ones to get hit when consumers cut back on their spending, especially when disposable incomes are squeezed by inflation.
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