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Consumer confidence remains high

Consumer confidence remains high

Category: Money

Updated: 24/06/2013
First Published: 24/06/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Increased optimism about the UK economy helped to boost overall consumer sentiment during May, pushing it to the highest level in over two years.

The Power Report from Lloyds TSB found the percentage of consumers who perceived the UK's economic situation to be "not at all good" decreased from 43% in April to 41% last month.

A further 54% considered their personal financial situations to be either "excellent, very good or somewhat good" in May, compared with 53% in April, with young people possessing the most enthusiasm and confidence when it came to looking ahead financially.

A total of 61% of all people aged between 25 and 34 said they were in an "excellent, very good or somewhat good" position financially, whilst 16 to 24 year olds were found to be the most optimistic when it came to saving for the future, suggesting that the age of austerity is encouraging more young people to put money aside rather than rely on credit.

The overall net balance of consumers who expect to increase their level of saving over the next six months rose by 1% from April and March.

Despite the encouraging figures, the high cost of living continues to weigh heavily on the shoulders of the majority of households.

The percentage of people relying on at least three quarters of their monthly income to pay for household bills and essential items rose to 47%, the highest level seen since January this year, whilst 79% of people said they were very concerned about rising gas and electricity bills.

Chief economist at Lloyds TSB, Patrick Foley, said: "The recent reports of a return to growth for the UK economy are being reflected in improved consumer sentiment, which is good news as better confidence will help to sustain the economic recovery.

"A gradual easing in the squeeze on consumers from essential spending is helping, although with energy bills increasing again, the improvement in spending power remains modest."

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