With another lockdown in place in England and similar restrictions in Scotland, Wales and Northern Ireland consumer confidence unsurprisingly fell in November by 2 points to -33, a 6-month low.
The fall may have been tempered by news of the vaccine breakthrough with both economic measures unchanged on October. Across the UK confidence varies; being weakest in Northern Ireland (-50) and Wales (-39) and strongest in London (-24).
Personal finance measures fell sharply in November suggesting that households are beginning to feel the impact of lower incomes and rising household costs as shorter and cooler days arrive with attendant heating costs. The JGFR Financial Wellbeing Index (derived from the GfK personal finance, saving and spending measures slumped by 27 points to -53 the lowest score since May and down 93 points on November 2019. The JGFR Feel-Good Index that measures unemployment, inflation , economic and personal finance expectations in the next 12 months fell 3 points to -81, 45 points below 12 months ago.
A separate question asking to rank issues of most concerns to consumers shows the pandemic by far the most pressing issue but with a big impact on family finances as around a third of adults are worried about not having enough money to live right and pay the bills, with unemployment / fears of recession highlighting the health v economy trade offs that politicians have had to make judgements on. Beside the pandemic over a third of the population cite the NHS and the costs of healthcare as a key issue.
With confidence a key driver of consumer and business activity and reflected in the coronavirus-led collapse in growth and in financial wellbeing, prosperity is under threat. News of a vaccine is a much needed boost to the health outlook but Wednesday’s Spending Review looks set to raise concerns about how the economic costs of the pandemic will be paid for and the longer term impact on prosperity.
Indeed the 2020 Legatum Institute Prosperity Index ( https://bit.ly/2HvcXSm) launched last week shows the UK the 13th most prosperous country in the world behind many fellow Northern European countries that dominate the global prosperity rankings. Scandinavia occupies 4 of the top 5 positions Denmark(1), Norway (2), Switzerland (3), Sweden (4) and Finland (5) followed by the Netherlands, New Zealand, Germany, Luxembourg and Austria completing the top ten.
While the report shows a general rise in prosperity over the past decade the pandemic is set to put many of the underlying measures under pressure as countries grapple with adjusting to a post-Covid world as mass vaccinations get underway. In the case of the UK Brexit will be an added major adjustment to absorb.
Download the full report from JGFR here: November 2020 Consumer Confidence Briefing