Consumer confidence unexpectedly improved in Britain in October as people grew less nervous about their own finances despite a gloomy economic outlook, a survey showed today.
The GfK/NOP consumer confidence barometer rose to -19 in October from -20 in September, confounding analysts' expectations for a further deterioration to -22.
Anticipation of painful government spending cuts and uncertainty over the economic recovery has weighed on consumers' mood for much of this year, and October's rise was only the second since February.
However, the compilers of the survey urged caution. The responses were collected in the first half of the month, before the government detailed spending cuts to welfare and government services in its October 20th Comprehensive Spending Review.
"Confidence has remained reasonably consistent since June but this could change as the public comprehends the full impact of the government's cuts," said Nick Moon of GfK NOP Social Research.
The survey showed Britons' perception of their personal financial situation over the coming year rose 3 points to -2, while their perceptions of the economic outlook fell one point to -20.
Figures earlier this week showed the economy grew a robust 0.8 percent in the third quarter of this year -- twice as fast as analysts had expected. But growth is expected to slow sharply going into 2011, when a rise in value-added tax and cuts to public spending cuts will kick in.
"As with this week's economic growth figures, the small rise on consumer confidence for October is really only a prelude to what happens next," said Mr Moon.
Reuters