UK consumer confidence highest since records began 40 years ago
Consumer confidence rose in December, capping 2015 as the best year for British morale since records began more than 40 years ago, according to latest figures.
Market research firm GfK said its monthly barometer of consumer sentiment showed a reading of 2 in December, up one point from November’s six-month low.
The robust December reading marks the first time the index has remained positive for an entire calendar year since the index started in 1974.
Consumer spending has helped to drive 11 quarters of UK growth so far in 2015 as Britons have been boosted by falling unemployment and wage increases outstripping inflation.
GfK said consumers were more confident over their personal finances than a year earlier, with a reading of 3 against minus 6 in December 2014. Expectations for personal finances over the year ahead were also strong, leaping three points to a reading of 9 in December – up eight points on a year ago.
But the report shows concern over the wider UK economy, with expectations for growth unchanged from November, while the reading is one point weaker than a year earlier, at minus 6.
The figures also showed consumers were slightly less tempted to make big purchases in December, with the index down to 7 from 9 in November.
Joe Staton, head of market dynamics at GfK, said the overall picture was robust.
“Consumer confidence has remained strong for all of 2015,” he said. “This is the first time since the Consumer Confidence Barometer started in 1974 that the Index has remained positive for an entire calendar year,” he added.
Households have been helped in 2015 as interest rates have stayed at the historic low of 0.5%, while the cost of living has remained largely static, with inflation even dipping into negative territory for a few months.
Plunging oil prices have helped keen a lid on inflation, with many retailers recently cutting petrol to less than £1 a litre. Simon Smith, chief economist at FxPro, said the consumer confidence data reflected the falling cost of crude.
“If ever there was an indication of how tumbling oil prices make consumers feel better about themselves, this is it,” he said.