LONDON, Dec 19 (Reuters) – British consumer confidence edged up in December to its joint-highest level this year after finance minister Rachel Reeves’ annual budget imposed few immediate tax rises on households, but morale remains subdued, according to a monthly survey.
The GfK consumer confidence index, Britain’s longest-running such measure, rose to -17 from -19 in November, matching levels seen in October and August. The index was last higher in August 2024, just after the Labour government took office.
“Consumers resemble a family on a festive winter hike, crossing a boggy field – plodding along stoically, getting stuck in the mud and hoping that easier conditions are not far off,” said Neil Bellamy, consumer insights director at GfK.
Households’ assessment of the general economy rose more sharply than their perception of their own financial wellbeing, while their willingness to make major purchases rose the most.
Consumer price inflation slowed more than expected in November to 3.2%, its lowest since March, and Reeves’ budget promised to shift climate change costs away from household energy bills into general taxation.
Overall, the budget will increase Britain’s tax burden by 26 billion pounds ($35 billion) a year, less than the 40 billion-pound increase announced in 2024, and most of that will not take effect this year or next.
Despite wages rising faster than inflation this year, British consumer spending – like that in much of Europe – has been slow while savings rates have remained high by historic standards, puzzling many economists.
The BoE cut interest rates on Thursday, its sixth reduction in borrowing costs since August 2024, but the central bank said future cuts were likely to be a closer call.
The GfK survey was based on a sample of 2,003 people aged 16 and over polled between December 1 and December 11.
($1 = 0.7493 pounds)
(Reporting by David MillikenEditing by William Schomberg)
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