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Consumer confidence reaches three-year high

Consumer confidence reaches three-year high

Category: Money

Updated: 22/07/2013
First Published: 22/07/2013

MONEYFACTS ARCHIVE
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A study has found consumer confidence and optimism climbed to the highest level since November 2010, prompted by increased activity in the housing market and better than expected economy growth.

According to the latest Lloyds TSB Consumer Sentiment Index, the volume of people who perceive the UK's economic situation as 'not at all good' fell by two percentage points from 41% in May to 39% in June this year.

Confidence in the housing market was seen to have improved as buyer activity increased and mortgage rates dropped to record levels with optimism in the future of the housing market buoyed by various Government schemes such as Help to Buy and FirstBuy.

The percentage of respondents who believe the housing market is 'not good' or 'not at all good' reduced during June by two percentage points to 69%. Around 27% believe it to be 'somewhat good', reflecting the highest level since the study began in November 2010.

Consumers remained optimistic about their own personal finances, with 54% describing their current situation as 'excellent, good or somewhat good'.

Young people were found to be the most happy with their ability to save money on a regular basis, with 60% of those aged between 25-34 stating they were in an 'excellent, good or somewhat good' position compared with 46% of 45-54 year olds.

Patrick Foley, chief economist at Lloyds TSB, said: "As the outlook for the UK economy gradually improves, firming consumer confidence remains vital to a self-sustaining recovery.

"More positive sentiment is therefore good news and, supported by greater stability in households' essential spending, should embolden consumers still further. But areas of pressure still remain, notably on energy bills, acting to restrain the improvement in spending power."

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