Confidence in the UK’s recovery is accelerating at the fastest pace in the north of England, Scotland and Northern Ireland, spreading from the parts of the country that growth reached earlier.
Deloitte’s latest survey of consumer confidence, out today, shows that while London and the south east of England are the most confident parts of the country, optimism is rising more rapidly in the northern regions of the UK.
The polling released this morning shows that the proportion of people who are more confident about their own disposable income is still in negative territory, with a net balance of 19 per cent more people pessimistic than optimistic about their household earnings.
But the figure is better than the 31 per cent recorded in the same quarter last year, and the 39 per cent two years ago.
Despite the improvement, 50 per cent of consumers still expect no salary increase in the next 12 months. Data from Lloyds, also released today, suggests that spending growth on essential items is up only one per cent on June last year, with low inflation helping to moderate the squeeze on incomes.
“Such concerns, together with the forecast of higher interest rates, may explain why consumers have told us they are planning to repay more debt and save more in the next quarter,” said Deloitte chief economist Ian Stewart.
He added: “Over the next year, the question will be whether any rise in real incomes will be enough to counter the effect of a potentially higher interest rate.”
Spending on gas and electricity bills during the period has actually declined by 2.5 per cent, and expenditure on car fuel has seen an even steeper drop of 5.5 per cent.
“Limited pressure on consumer wallets from essential spending also helps support consumers’ capacity to undertake discretionary spending in the months ahead,” said Patrick Foley, Lloyds’ chief economist.
Lloyds’ regional purchasing managers’ index (PMI) for June, which was released last week, also showed particular strength in the north east of England. The survey score for the region reached 64.8, leading the country and far above the neutral 50 mark and the most positive reading on record.