Nationwide: British consumer confidence climbs to highest level in two years

03-03-2010 08:56

Nationwide Building Society revealed that consumer confidence in the United Kingdom improved to the highest level in two years last month, as the economy found its path out of recession. The gauge of sentiment jumped six points in comparison to January to 80, the building society stated this Wednesday. An index gauging confidence towards the economy in six months’ time increased to the highest level since record keeping started in 2004.

Consumer confidence

Martin Gahbauer, chief economist at Nationwide, commented: “A strong and sustainable economic revival largely depends on consumer confidence, and the initial signs are optimistic. It is expected that confidence will continue its fragileness in the next months. The fact that the United Kingdom has exited its worst recession on record has strongly impacted this increase.”

Labour government

Prime Minister Gordon Brown is reducing the discrepancy between his Labour government and the Conservatives in the struggle to persuade that he is best placed to stimulate the UK economic improvement. The British economy grew 0.3% in the fourth quarter of last year, exceeding previous forecasts, after six quarters of shrinking.

Confidence United Kingdom

The index regarding confidence among citizens of the United Kingdom towards the current economic situation gained 4 points to 27, which is the highest level since late 2008, according to the customer-owned lender. The gauge of confidence towards the economy in six months’ time rose 6 points to 115. In the meantime, the gauge that measures if it’s the right time to spend dropped 4 points to 93. The survey was conducted by TNS-RI Research among 1.000 Britons for Nationwide from January 18 to February 15.

Minority government

A ComRes Ltd. poll of last Monday showed that the Conservatives’ lead over Labour diminished to 5 percentage points. This development would lead to the initial minority government since 1974 in the UK. The voting must take place by June.

Joblessness

The economic improvement could reduce joblessness. An index regarding hiring of permanent employees showed the fastest increase since mid 2007 last month, rising from 60.5 in January to 63.2 in February. A reading higher than 50 implicates a rise in hiring.

Inflation

Inflation increased to the highest rate in 14 months in January, which could ease price pressures. Prices of goods in British shops jumped 1.7% last month, in comparison to a 2.3% rise in January, today’s UK Retail Consortium survey showed. Food prices rose on a yearly basis by 1.3% and non-food prices climbed by 1.9%.