Consumer confidence across Britain registered the fastest growth seen in eight years during the month of December, bolstered by the rollout of the COVID-19 vaccine that could hopefully contain the pandemic. The GfK consumer confidence index surged from -33 in November to -26 in December, although it still remains in negative territory indicating pessimism.

However, the reading came in far better than economists’ forecast which was for a rise to -31 instead. This was also the highest jump seen in consumer confidence since late 2012, with the index touching the highest level since September – just before the second wave of the pandemic struck Britain.

The biggest improvement came in consumers’ outlook for the economy, which registered a 15-point increase since November. GfK’s client strategy director, Joe Staton, observes, “Consumers are looking for good news and they have found it in the form of the UK’s COVID-19 vaccination programme getting underway, which has lifted the mood pre-Christmas 2020.”

Consumer spending is a key contributor to Britain’s GDP, and with the economy experiencing its most severe downturn in modern history, the improvement in consumer confidence offers some hope for the British economy. According to latest estimates by the BOE, the British economy is expected to contract by a little over 1% in Q4 2020 but the economic recovery in Q1 2021 could be weaker than previously anticipated due to the latest round of lockdowns and restrictions.