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Consumer confidence at 9-year high

News, 28 May 2015

LONDON: UK consumer confidence is higher than at any time since the pre-recession days of 2006, while the proportion of those willing to spend money is at its highest on record, according to the latest data from research firm Nielsen.

As reported by the Press Association, Nielsen's UK Consumer Confidence Index hit 97 in the first quarter of 2015, its fifth consecutive quarter of growth and taking it close to the 100 benchmark that separates optimism from pessimism.

The UK has not seen such a high level of consumer confidence since the first quarter of 2006, when sentiment reached 101, and it means the country matches Nielsen's Global Index of 97.

Close to half (45%) of British consumers now feel positive about their job prospects, the highest level for more than seven years, while the proportion of people feeling now is a good time to spend is also up three points to 45%.

Meanwhile, even though the UK has been recording strong economic growth for some time, just over half (51%) still believe the country is in a recession.

But the proportion holding this view has fallen for the eighth consecutive month and 51% is the lowest level since the question first appeared in the UK Index in 2008.

Commenting on the findings, Nielsen UK managing director Steve Smith, said: "Consumer confidence in the UK continues to rise. The UK is one of the fastest growing major economies, unemployment is falling and people are benefiting from zero inflation and lower prices in supermarkets and petrol stations.

"Whilst the majority of people are still cost-cutting – perhaps habitually now – wages, for others, are rising faster than household expenses.

"This is leading to more optimism about their future spending, so we expect to see confidence continue to rise in 2015."

The latest good news about the British economy followed another optimistic report from the Confederation of British Industry, which found retail sales in May reached their highest level in more than 26 years.

The employers' organisation also said sales expectations for the year to June were even more optimistic with 63% of UK retailers expecting sales volumes to grow again.

"Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power," said Rain Newton-Smith, director of economics at the CBI.

Data sourced from Press Association, BBC; additional content by Warc staff