Friday 20 November 2020 12:01 am

Little ‘Christmas cheer’ as UK consumer confidence falls

New coronavirus restrictions and rising cases knocked UK consumer confidence in November, a survey has shown, as people became more gloomy about their future economic health.

The closely watched consumer confidence index from researcher GfK fell two points to minus 33 in November, its lowest reading since June.

Read more: BoE governor Andrew Bailey: Vaccine ‘a big step forward’ for UK economy

Britain’s economy has been hit particularly hard by coronavirus. Although it grew rapidly in the third quarter, GDP remained around 10 per cent below its pre-coronavirus level.

Now, a new England-wide lockdown – put in place to curb soaring coronavirus cases – threatens to knock the recovery off course. The Bank of England reckons the economy will contract in the third quarter, with vaccines unlikely to have much effect before January.

GfK’s survey showed that Brits became more pessimistic about the likely state of their finances over the next 12 months in November. People also said they were now slightly less likely to make big purchases.

However, people’s view of the general economic situation remained unchanged. The measure remained at historically depressed levels.

The loss of consumer confidence “will deal a blow to any future rebound,” said Joe Staton, client strategy director at GfK. 

“Bullish consumer spending fuels the UK economy and low confidence is the enemy of recovery.

Read more: Rishi Sunak warns second lockdown will have ‘significant’ impact on UK economy

“The second lockdown couldn’t have come at a worse time for the UK’s high-street retailers and it’s no surprise that our major purchase sub-measure is once again mired deep in negative territory.

“On all fronts, economic headwinds still outnumber tailwinds sadly and consumers can be excused for showing little in the way of Christmas cheer.”