Consumer confidence has reached a record high as the pressure on household wallets continues to ease, according to new research.
The Lloyds Bank Spending Power Report has found that consumer confidence rose to 138 points in April 2014 – the highest recorded index since the survey began in November 2010.
Spending growth on essential items remained under 1% for the second consecutive month. Spending growth on gas and electricity slowed to around 1% compared to mid-2013 and on average consumer spending on fuel is 5% lower than a year ago.
The survey of 2,000 people found that:
- housing market confidence continues to grow with a balance of -4%, a 40 percentage point increase year-on-year
- opinion on the employment situation remains at -36%, a 33 percentage point increase year-on-year
- consumer confidence in personal finances is at +14%, up 8 percentage points year-on-year
- people aged 45-54 are the only age group with a negative view of personal finances, increasing -4% in March 2014 to -7% in April
- Scotland holds the most negative consumer sentiment with 80% feeling the country’s financial situation is ‘not good’ or ‘not good at all’.
Patrick Foley, chief economist at Lloyds Bank, said:
“Continuing gains in consumer sentiment mirror the ongoing improvements in the UK economic backdrop. Meanwhile, reduced pressure on consumer wallets from essential spending, strong growth in employment, and looking ahead, a pick-up in wage growth, are likely to boost spending power, improving the capacity of consumers to undertake discretionary spending.”
Philip Robinson, director of personal current accounts at Lloyds Bank said:
“We are now starting to see a more general air of positivity towards peoples’ finances. This will help build consumer confidence and have a trickle affect when it comes to consumer choice on their discretionary spend. Looking towards the summer, this is likely to rise in the months ahead, with customers feeling more in control of their finances.”