Morale boost among British consumers

Julian Harris
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JANUARY is often considered the most depressing time of the year, yet a leading index of consumer morale has surprised economists by reaching a seven-month high during the opening weeks of 2012.

Softening inflation and lower energy prices could be behind Brits reporting a less negative evaluation of their economic wellbeing, according to GfK NOP, which conducts the research.

“The index is sometimes subject to non-economic influences, and the uplift may simply reflect a hangover from the Christmas feel-good factor,” added Nick Moon, managing director of the firm.

Despite the four-point uptick in the index, Moon warned that a similar boost was observed at the time of extra bank holidays and sunny weather surrounding the royal wedding last year – only for the index to sink back down in subsequent months.

The survey’s leading indicator remains deep in negative territory, coming in at -29 for January, up from -33 in December.

“Should February show another rise then we may be seeing signs that the gloom is dispelling,” Moon said. “Until then we should treat January’s findings as good, but certainly not great, news.”

Respondents were notably less pessimistic about economic prospects for the coming year, the survey showed. A sub-index measuring the “general economic situation over next 12 months” bounced back from December’s low of -41, coming in at a less severe -33.

And fewer consumers were found to be ruling out major purchases, as the sub-index for measuring this element improved to -22, from -31 last month.

All five sub-indices recorded by the survey increased on the month.