Survey shows slight improvement in UK consumer confidence

For the second consecutive month, UK consumer confidence has improved, indicating that the huge reduction in interest rates and the recent cut in VAT are having a positive effect.

The consumer confidence index from market research group GfK NOP rose two points to -33 in December, taking it to the highest level since September. However, it is still hovering near all-time lows.

The news comes just one day after the Office for National Statistics revealed a surprise rise in UK retail sales last month. Sales volumes rose 0.3% in November and are up 1.5% on last year.

Rachael Joy at GfK NOP said while the news is good, the question is whether the improvement in this index will be translated into activity on the High Street during the January sales.

In the last three months alone, the Bank of England has cut rates aggressively from 5% to 2%, while the Government cut VAT from 17.5% to 15% until the end of 2009 in a bid to boost consumer spending.

In a bid to boost sales even further, supermarket giants Tesco, Asda and Sainsbury’s are to open some of their larger stores on Boxing Day. There is speculation that other retailers will feel under pressure to follow suit.

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