Pessimism among UK consumers perks up as inflation peaks

British consumers turned a little bit less pessimistic in December as inflation started to fall back from historic highs, a survey published on Thursday showed.

Polling firm YouGov and consultancy Cebr said their overall consumer confidence index rose by 1 point from November although at 95.9 it remained stuck in negative territory. In December 2021, it stood at 110.0.

“While we expect inflation to continue to subside throughout 2023, consumers will still feel the pinch from higher food prices and those exposed to higher mortgage rates will see their monthly costs go up significantly,” Kay Neufeld, director and head of forecasting at Cebr, said.

The survey showed consumers were worried about the loss of value of their homes but they were more confident about the outlook for their finances.

Britain’s inflation rate hit a 41-year high of 11.1 per cent in October but eased off to 10.7 per cent in November. The Bank of England thinks it will slow to about 5 per cent by late 2023.

YouGov said its survey was based on 6,000 interviews over the month of December.

A separate survey of consumer confidence conducted by polling firm GfK last month also showed a slight increase in optimism in December but figures published earlier this week showed consumer spending lagged inflation.