This is an interesting novel, perhaps mostly for this reason: Stevie Smith didn't want to write it, really. What happened was that she wrote a collection of poems, and when she took them to her publisher, they asked her to please write a novel instead, and she wrote Novel on Yellow. Pompey's decision to write on yellow paper is similar to Smith's own switch from poetry to prose.
And how does Smith spend her novel? In the satirical, sarcastic mind of a highly intelligent, annoyed young girl who feels the grasp of the world closing in around her. When Pompey travels to Germany, the verdict is that whatever she was hoping to find there by visiting her friend "Karl," she didn't find it, and she was almost disturbed by German life. Perhaps this is a social commentary on the effects of Marxism in Germany, since the name of the friend is Karl.
Then, the criticism becomes less about politics and more about gender roles. When she accidentally says yes to marrying Freddy, having decided to say no, there's a sense in which she just got caught up in serving his expectations, doing what was expected of her. This is a clever way of drawing the readers attention to all the expectations that are placed on young women, and the role they are asked to play by sacrificing their will to augment a young man's self-esteem (in Pompey's opinion).
In either case, the novel ends up being about a woman whose life seems crowded and foggy from all the various ideas and assumptions in her culture that she does not agree with, but which are out of her control.
