United Kingdom: May consumer confidence hits over-nine-year high
June 27, 2014
In June, the GfK NOP consumer confidence indicator rose to 1 point, which was up from the minus 0 points recorded in May. The print marked the highest level since March 2005, which suggests consumers’ confidence has fully recovered following the sharp drop recorded in the worst stages of the recent financial crisis.
June’s figure was driven by improving expectations regarding nearly all the components that make up the index. Households were more optimistic regarding the general economic situation; their perceptions regarding the previous 12 months and the next 12 months improved. Consumers’ views of their past personal financial situations also improved, whereas their expectations regarding future financial conditions deteriorated slightly in June. Households’ outlook on future financial conditions are being affected by the increasingly likelihood of a rate hike by the Bank of England in the coming months, which could tighten credit access and increase mortgage payments. Finally, consumer’s willingness to buy big-ticket items reached the highest level since August 2007.