LONDON, (Reuters) – People in Britain are more optimistic than ever despite concerns about inflation. They also seem more inclined to spend more on expensive goods this month according to a poll that is good news for retailers preparing to celebrate Christmas.

GfK Consumer Confidence Index rose to -14 November, its highest level in 4 months. This was a significant improvement from October’s -17. It was also the lowest since early-2021 when it locked down due to coronavirus.

According to Reuters, economists expect further decline this month up to -18.

Joe Staton (GfK’s Client Strategy Director) stated that although inflation has risen and there is the possibility of higher interest rates, views regarding the economy are improving. However, consumers remain less positive about their personal finances.

Staton explained that this weakness was important because it is indicative of day-today savings and spending intentions. Staton also stated that the weakening is a powerful driver of economic growth in the UK.

However, the 7-point increase in major purchases intentions during the Black Friday and Christmas periods is a highlight of both virtual and physical retail.”

GfK’s consumer propensity measure, which measures consumers’ willingness to purchase major goods and services, has increased to -3 from 10 points in November 2013. It is now 25 points higher that it was in November 2012.

According to The Bank of England, an increase in inflation, as well as other pressures on household finances (including the removal of welfare assistance for those affected by pandemics), could hinder Britain’s economic recovery following the coronavirus crisis.

On Dec. 16, the BoE will announce whether or not it plans to raise interest rates. This is after many investors were misled by it on Nov. 4, when it kept borrowing costs at their lowest level despite anticipating that inflation would rise to around 5%.

According to November 17 data, British consumer inflation reached a 10 year high of 4.2%. This is more than twice the BoE target of 2%.

GfK surveyed 2,000 respondents between Nov. 1, and Nov. 12, 2008.