In his speech to the Conservative conference in Birmingham this week, George Osborne stated: “Britain is the fastest-growing, most job-creating, most deficit-reducing advanced economy on earth." Whether voters feel these statistics in their wallets will be a key issue for politicians in the weeks and months leading up to the general election on 7 May next year.
But how do consumers feel about how the recovery is progressing? The latest YouGov/Cebr Household Economic Activity Tracker (HEAT) analysis shows that economic optimism remains stable. After a small fall in August, the YouGov/Cebr Consumer Confidence Index increased by 0.4 points in September to 114.2. The Index has been remarkably steady since May, hovering consistently between 113.8 and 114.4.
The data suggest that the levelling-off in consumer confidence comes as increasing numbers of homeowners think their properties have not risen in value in the past month. We have compared the data for London with that for the rest of the United Kingdom to see how much of this is being driven by the capital.
In June, 29 per cent of London property owners did not think the price of their property had increased in the past month, a figure that has increased to 39 per cent in September. Our analysis suggests that the more muted view of the housing market is not confined to the capital as a similar picture is emerging across the rest of the United Kingdom, albeit on a more gentle scale. In June, 62 per cent felt their property had not increased in value, but in September this number has risen to 66 per cent.
Consumers have also seen their household financial situations level out and among Londoners it has even fallen slightly. In May, 87 per cent of people in the capital had not felt their financial situation improve, a number that increased to 89 per cent in September. Across the rest of the UK during the same period, consumers’ household financial situations have remained pretty much static, with 90 per cent seeing no month-on-month improvement in May and 91 per cent in September.
It is interesting that the general plateauing of economic optimism across various measures is not just happening in London, but also throughout the rest of the UK. With next May getting ever closer, whether this levelling off of economic outlook indicates things are comfortingly steady or have stalled worryingly will be one of the key arguments in the next general election campaign.
Image from PA