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Consumer confidence climbing to new heights, says Deloitte

POSTED: 1st May 2014
IN: Personal News
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Consumer confidence is continuing to improve in the UK, according to the latest research from a well-known business advisory firm.

Consumer confidence is continuing to improve in the UK, according to the latest research from a well-known business advisory firm. undefined

Deloitte said public sentiment has climbed to a two-year high, with the confidence index in the company's latest Consumer Tracker 11 points higher than in the third quarter of 2011.

People are becoming more positive in many regards, with discretionary spending expected to increase in the second quarter of this year.

There was a year-on-year increase in net expenditure on big-ticket items between January and March, according to Deloitte, while spending on holidays and electrical goods has also picked up over the past year.

This trend can be linked to improving attitudes towards pay and jobs, with an index measuring sentiment about disposable incomes increasing from -27 per cent in the final quarter of last year to -20 per cent at the start of 2014.

Only 12 per cent of survey respondents revealed they had recently lost their income or suffered a pay cut, down from 14 per cent in Q4 last year.

Deloitte said the findings provide further evidence that the UK economy is experiencing a steady recovery.

Ian Stewart, the firm's chief economist, said: "Lower inflation, easier access to credit, historically low interest rates and an improving job market have all helped bolster consumers' spending power."

However, there was also a note of caution regarding interest rates, which remain at a historic low but could increase before the end of 2014 if the economic recovery continues.

Ben Perkins, head of consumer business research at Deloitte, said: "Although consumers have been more upbeat in Q1 2014, the possibility that interest rates could rise remains a concern for them."

The Bank of England's forthcoming interest rate decisions will be based on macro-economic factors including unemployment, which recently fell below seven per cent.

Business bodies such as the Institute of Directors have said the Monetary Policy Committee is unlikely to rush into an interest rate hike anytime soon.

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