Nationwide: UK consumer confidence at two-year high
Consumer confidence in UK reaches two-year high, according to Nationwide research
Wednesday, 03, Mar 2010 11:34
By Sarah Garrod.
Consumer confidence in the UK has reached a two-year high and is almost double what it was last year, researchers have said today.
Nationwide has found in its consumer confidence index that February saw the second consecutive month of rising confidence, meaning the index now stands at its highest level since January 2008.
Confidence in the housing market also rose, showing people expected their homes to increase in value by 1.5 per cent over the next six months.
However the building society said confidence in spending continued to fall away during the month and dropped four points to 93 in February.
Martin Gahbauer, Nationwide's chief economist, said: "Following a small dip at the end of 2009, consumers have started this year in a more optimistic fashion with February's figures showing a surge in confidence in both the present and future situation.
"A strong influencing factor behind this uplift is likely to be the news that the UK has come out of its longest recession on record following six consecutive quarters of contraction beginning in 2008.
"By comparison, it would seem that consumers are perhaps feeling the pinch in their spending power as confidence declines in this area, and we may now be seeing the effects of the withdrawal of government driven incentives, such as the stamp duty holiday and lower VAT, impact on the index."
Consumer expectations towards the future economic and employment situation both improved during February, according to Nationwide, with 39 per cent believing the economic situation will be better in six months' time and less than half believing there will be not many or few jobs available.