YESTERDAY’S GDP figures provided further evidence that the economy is firmly on the mend. The official statistics show that consumers remain at the heart of the recovery and YouGov’s Household Economic Activity Tracker shows that not only are they increasingly optimistic but they are also starting to see the upturn in their wallets.
In terms of consumer confidence, we are now back to where we were before the recession. After slightly sluggish improvement throughout the first quarter of 2014 when it rose by just +1.5 points, in April the YouGov/Cebr Consumer Confidence Index increased by a more robust +1.2 points. It is now at its highest level since August 2007 and it is set to make great strides over the summer.
While the major force behind this increase is rising house values, YouGov’s data show that at last the benefits of the recovery seem to have started to reach employees as well as homeowners. Over the last year, there has been a noticeable improvement in the proportion of employees getting pay rises, promotions or bonuses, with 44 per cent of employees now saying that they have received increased benefits over the previous 12 months.
This improvement in the workplace suggests that consumer confidence is built on increasingly solid foundations, pointing to a broader, deeper recovery. But before we get too carried away it is important to remember that the proportion of people who think they will be worse off this time next year is still higher than those who think they will be better off. Whether this changes could be a crucial element of next year’s general election campaign, and we will be monitoring it over the next 12 months.
Stephan Shakespeare is chief executive of YouGov.