UK consumer morale hits nine-year high

Morale among UK consumers is at a new record high, according to a GfK poll.

Consumer morale in the UK is at its highest level in nine years, a new poll from research company GfK has found.

Its monthly consumer confidence index rose to +1 in June, up from zero in in the previous month and the highest rate since March 2005. A Reuters poll forecast suggested the figure could have been as high as +2, but the figures continue an upward trend that points towards growing confidence in the UK economy.

“The next few months will be particularly interesting, since the previous venture into positive territory was merely transitory – two isolated months in January and March 2005,” Nick Moon, managing director of social research at GfK, told Reuters. “The last time the index was consistently positive was back in 2002 and this must be the next target from the government’s point of view as we get close to the election period.”

Given the level of consumer confidence, it seems that spending could remain high and even rise further in the next 12 months. Indeed, it could suggest that consumer spending will continue to be one of the biggest drivers of expansion.

Figures published on 27 June by the Office for National Statistics (ONS) showed that household spending did rise by 0.8 per cent in the first quarter of the year, equal to around £2 billion. That also represented a one per cent increase from the previous three months.

What’s more, the data shows that household spending has risen year-on-year in every quarter since the start of 2012, indicating that UK consumers have become more and more optimistic over the course of two years. For the moment that trend looks set to continue.

Transport saw the biggest increase, with spending up 2.3 per cent from the last quarter of 2013 – although food and drink has slipped by 1.3 per cent over the same period.

Even so, given that households spend more during the festive period and often find the beginning of the New Year tougher, that may not be too surprising. Overall, it looks as though consumers are still positive about the outlook for the UK.