Confidence in the UK economy climbed again this month, with one major index hitting the highest level in nearly a decade, a positive signal for growth in the rest of 2014.
GfK’s consumer confidence index rose back into positive territory this month, rising to one – the survey has only risen into positive territory once since 2005.
Every part of the index improved from July’s reading, with respondents increasingly positive about their own financial situation and the economy generally. The figures bucked the expectations of some analysts, who expected the threat of a looming interest rate hike to weigh against sentiment.
The index was in negative territory for the vast majority of the pre-crisis growth period, and if the score remains positive for a three-month run, it will be the longest period since 2002.
Further survey data released yesterday morning showed that retailers were at their most optimistic in 12 years about upcoming sales, adding to a bundle of positive news about the UK economy.
The Confederation of British Industry (CBI) yesterday released their latest survey, showing the highest optimism about sales during the next three months than at any time since early 2002.
More than half of stores said sales volumes were up on last year, against just 14 per cent that recorded a drop over the period.
“We expect that further strong gains in employment and a gradual pickup in real pay should provide a boon to spending over the second half of this year,” added Paul Hollingsworth of Capital Economics.
Despite the positive news, the British Chambers of Commerce (BCC) yesterday forecast that household consumption would slow markedly in future, from growth of around 2.9 per cent this year to just 2.2 per cent by 2016, and that other sources would have to be found for a continued expansion.