Post-Budget consumer confidence rises in golden quarter boost
A leading confidence survey has found that consumer sentiment rose in November, which will come as a relief to businesses dependent on a good golden quarter to boost margins ahead of tax rises next year.
All five measures of confidence rose, although major purchase intentions led the pack with a five-point jump.
“There was evidence of nervousness in recent months as consumers contemplated the potentially worrying impact of the UK Budget at home, and even the implications of the US presidential election,” Neil Bellamy, consumer insights director at GfK, said.
“But we have moved past those events now. The biggest change this month is in major purchase intentions, an important measure that has jumped five points from -16 to -21 in the run-up to Black Friday next week,” he added.
Black Friday will be the first test of consumer confidence during the all-important golden quarter.
Vouchercodes expects spending in the UK to be 5.6 per cent higher year on year on Black Friday, at £3.18bn.
Fall in savings index is a positive sign
The savings index decreased three points to +24, five points lower than this time last year in a good sign that wallets are loosening and people are more willing to spend on goods.
Consumer spending is closely linked to consumer confidence – the happier people feel about the stability of their income, the more likely they are to maintain or increase spending.
However, Linda Ellett, UK head of consumer, retail and leisure for KPMG, said that while consumer confidence continues to be variable, ability to spend “depends on household circumstance”.
“Inflation, interest rates having not yet sufficiently fallen, and a toughening labour market are all weighing on the minds of many people,” Ellett added.
Overall sentiment remains negative
Ellett’s comments echo different confidence survey out earlier this week, which found that consumer confidence dipped in November and warned it would fall further 2025.
The S&P Global UK Consumer Sentiment Index (CSI) survey said overall confidence fell from 47.3 in October to 46.9 in November. The neutral mark is 50.
“Any intensification of job worries, spurred perhaps the recent measures announced in the Budget, including higher employer National Insurance contributions, could result in a further loss of consumer confidence,” chief business economist at S&P Chris Williamson said.
But even in GfK’s survey, overall sentiment remains negative, and five points below 2024’s peak in August of -13 points.
“While 2025 is just around the corner and the New Year often brings optimism, it’s too early to expect significant further improvements in the consumer mood,” Bellamy said.
“As recent data shows, inflation has yet to be tamed, people are still feeling acute cost-of-living pressures, and it will take time for the UK’s new government to deliver on its promise of ‘change’,” he added.
Correction: An earlier version of this article stated that Barclaycard expected Black Friday spending to be up 3.6 per cent year on year. This has since been removed.