United Kingdom: Consumer confidence surges in May
June 15, 2011
In May, the seasonally adjusted consumer confidence index produced by Nationwide Building Society (NBS) increased 11 points over the previous month to settle at 55 points, which represented second highest monthly surge on record. According to the NBS, May's consumer confidence was boosted by exogenous factors such as extra bank holidays and the Royal Wedding. That said, the index remains at levels comparable to those observed during the recovery that began at the outset of 2009 and continues to sit below the long-run average of 79 points. The May increase in consumer sentiment saw an improvement in the Spending Index, which increased by sixteen points to 79 points. Nevertheless, some 45% of the respondents still believe it is a bad time to make major purchases of goods such as a house or car. The Expectations Index was up seventeen points to reach 76 points, however, the majority of respondents continue to negatively assess the employment situation in the short term. The Present Situation Index was up just three points as some 64% of the respondents believe that current economic situation in the United Kingdom is bad. Improving consumer sentiment bodes well for a more meaningful recovery in private consumption.