Consumer confidence in January rebounded to its best level for almost seven years.

The GfK Consumer Confidence index rose six points month on month to -7 in January, its highest level since September 2007. All five measures in the index saw “substantial” improvements in January.

In the last nine months the index has risen by a “massive” 20 points, according to GfK managing director of social research Nick Moon. He said it is only the third time in the 40 years of the index that there has been such a substantial nine-month shift.

Moon said: “After three consecutive one-point falls in the index, January saw a dramatic return to the rapid improvement seen last summer, with a six-point rise. This more than cancels out the recent falls.

“All this is good news for the Government as the election starts to get within sight. Growing confidence should manifest itself in greater spending, but the somewhat anaemic retail sales figures for December suggest that the huge growth in the confidence index over the summer didn’t lead to a similar growth in spending. It will be interesting to see, over the coming months, how the relationship develops between confidence, disposable income, and consumer spending”. 

Consumer confidence regarding personal finances over the next 12 months increased six points this month to 3, which is 10 points higher than this time last year.

Confidence about the general economic situation over the next 12 months jumped six points to 2, which is 27 points higher than this time last year.

Consumers’ propensity to buy big-ticket items rose seven points to -10. This is 12 points higher than this time last year.