US consumer confidence edged higher in November after a big drop in October, as fewer Americans felt the economic situation was likely to worsen. The closely-watched Consumer Confidence Index from the Conference Board rose to 49.5 from a revised 48.7 in October.

But in a downbeat report, the board said income expectations were “very pessimistic” and consumers were in “a very frugal mood”. The figures cast doubt on how strong Christmas spending will be this year. Consumer spending accounts for about 70% of overall economic activity in the US, so weak spending in the run-up to Christmas could have serious implications for the US economy. A reading of 90 on the Confidence Index is the minimum to indicate a healthy economy.