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Consumer confidence surges in UK

News, 28 July 2015

LONDON: Consumer confidence in the UK is at a nine-year high, having risen for the sixth consecutive quarter to take the country above the global average for the first time since 2006.

Nielsen's UK Consumer Confidence Index rose from 97 in the first quarter of 2015 to 99 in the second while the global average dropped from 97 to 96.

The research firm, which measures attitudes among 30,000 internet users in 60 countries, also said the UK overtook Germany (97) in Q2 2015 to make it the second most confident nation in Europe behind Denmark (112).

It means that UK consumers are now at their most positive since 2006, when Tony Blair was in his third term as Prime Minister and the UK was enjoying a consumer boom before the global economic crisis struck.

Confidence across Europe remains subdued at just 79 as the region struggles with high unemployment, weak growth and fallout from the Greek economic crisis.

Greece had the largest quarterly decrease in confidence, falling 12 points to 53, while Ukraine (48), which is embroiled in conflict with Russia, recorded the lowest level on the continent.

Steve Smith, managing director of Nielsen UK & Ireland, outlined the underlying factors that helped to make the UK the most confident major economy in Europe.

"Consumers in the UK are feeling ever more confident. Wage inflation is starting to outstrip price inflation for the first time in years, while mortgage rates are at historically low levels and unemployment has generally been falling," he said.

"This positivity is reflected in the cornerstone of household budgets: grocery spending," Smith continued.

"The number of UK consumers switching to cheaper grocery brands in order to save money is at its lowest level (30%) since late 2009. This is an encouraging sign for retailers that consumer purse-strings may be starting to loosen."

Further encouragement comes with the finding that the number of Britons feeling positive about their personal finances increased for the second consecutive quarter to 53%, its highest level for nearly eight years.

Meanwhile, in another lift to the UK's economic prospects, the latest Lloyds Bank Spending Power Report revealed another month-on-month increase in consumer confidence.

Its overall index climbed to a record high of 164 points in June as spending on essential bills fell and discretionary income increased.

Data sourced from Retail Times, Nielsen, Lloyds Bank; additional content by Warc staff