Consumer confidence has reached a four-year high as the summer’s good weather improved shoppers’ mindsets despite continued pressure on wages.
The monthly GfK consumer confidence barometer for August showed the public’s optimism was at its highest level since October 2009 and displayed the biggest improvement in confidence over a four-month period since 1982.
The barometer rose month on month by three points in August, following a five point rise last month, and now stands at -13.
The barometer showed that, compared to last month, consumers are no more positive about their own finances – the result was static at -16, five points higher than August 2012 – but are confident that the prospects for the UK’s economy have improved.
Big ticket retailers will be encouraged by the survey’s results which show the climate for major purchases increased five points month on month in August to -16. This is 15 points higher than this time last year.
GfK managing director of social research Nick Moon said: “As more and more official figures show that we are all worse off, with UK living standards at their lowest for a decade, the British public’s economic confidence continues to grow strongly – a conundrum of Alice in Wonderland proportions.
“So how to explain this seeming paradox of confidence rising while real income falls? This month offers a possible partial explanation, with the elements relating to personal finances stable, while those relating to the country as a whole rising. However this is only a partial explanation, because in recent months the personal finance items have also been rising.”
He added: “The explanation probably lies in the fact that there has been a steady flow of economic good news over the past few months showing the economy growing.”