Optimism in the UK Economy Lifts Consumer Confidence

In the UK, GfK NOP's most recent Consumer Confidence headline index for October has risen 2 points from –7 to -5: three points higher than this time last year. Three of the five measures this month have seen increases in their index figures, bringing them back to the levels last seen in July. The annual moving average remains the same as last month at -6.

The index measuring changes in personal household finances over the last twelve months has seen a decrease of 2 points over the previous month and now stands at 0, which despite the decrease is still four points higher than the level recorded in October last year.

There has also been a small change of opinion regarding the outlook for household finances over the next year. This index has risen by two points from +10 to +12 this month; 5 points higher than in October last year.

Views regarding the general economic situation of the country over the last twelve months have seen a substantial rise of five points this month, up to –27. In October lat year the index was at a very similar level at -26. In addition, there has also been a substantial rise in expectations for the general economic situation over the next twelve months with the index increasing by six points to -15. In October last year, the index stood at –19.

The measure on whether now is the right time to make major purchases has seen a small decrease of two points this month and now stands at +6, 4 points higher than in October last year when the index was at +2.

The 'now is a good time to save' index has also recorded a decrease dropping 3 points this month to +31, but the current index figure is six points higher than in October last year.

Carol Bernasconi, Divisional Director at GfK NOP commented "Consumers are shrugging off the factors associated with falling confidence levels, such as increasing levels of personal debt and looming interest rate hikes, and are looking forward with renewed optimism. Undoubtedly, FTSE levels not seen since February 2001 and the average house price reaching £200k have helped to influence this positive outlook, and the noticeable change in mood this month is that better times lie ahead."

The UK Consumer Confidence Survey from GfK NOP was conducted amongst a sample of 2001 individuals aged 16+ on behalf of the European Commission. Quotas are imposed on age, sex, region and social class to ensure the final sample is representative of the UK population. Interviewing was carried out between the 6th and 20th October 2006.

The company is online at www.gfk.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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