Confident shoppers boost economic growth hopes

Shoppers are benefitting from lower oil prices, letting them spend more on the high street
UK CONSUMER confidence saw a large jump in January, in a renewed sign that the economic recovery will continue strongly into 2015.

Retail sales also grew strongly in the month, according to the Confederation of British Industry (CBI), indicating consumers are increasingly upbeat.

The consumer confidence index compiled by market researchers GfK reached a score of one from December’s minus four, according to figures released today.

The score is the highest since August last year and is consistent with strong levels of economic growth.

Consumers were more upbeat on the economy over the next 12 months and said they were more likely to make a major purchase than one month ago.

“With less than 100 days before the election, this big jump in the Index will be very welcome news for the government,” said Nick Mood, a director at GfK.

“But before we get too carried away we need as always to look at the bigger picture.”

Mood believes a rise in the index next month will be evidence people are benefitting from GDP growth.

The economy grew by 2.6 per cent in 2014 but slowed in the final three months of the year, official figures showed this week.

The CBI’s survey of retailers showed 50 per cent of firms reported higher sales this January than last January, compared with just 10 per cent who saw business volumes fall.

And 46 per cent expect sales to grow in the coming month, when just four per cent expect a decline.

Clothing, furniture and grocery shops saw the biggest surges in sales.

“Falling oil prices and low inflation mean consumers have a bit more money in their pockets,” said the CBI’s director of economics Rain Newton-Smith.

“We expect to see this translate into strong sales growth in the months ahead.”