- Economic optimism at highest level since last September
- Six of eight consumer confidence measures increase this month
- Proportion who think their household financial situations have worsened at lowest levels since YouGov started measuring it in 2009
- However, only 10% of households say their finances have improved in past month
Source: YouGov/Cebr HEAT data, February 2015
Notes: Axis value of 96.9 represents the average YouGov/Cebr Consumer Confidence Index score since the data set began in 2007.100 represents a neutral score.
With less than two months to go until the general election, the latest YouGov/Cebr Consumer Confidence index finds that consumer confidence is building as pay growth outstrips inflation.
The research from YouGov’s Household Economic Activity Tracker shows that after a slow end to 2014 economic optimism has rebounded strongly and is at its highest level since last September. It now stands at 112.7, up from 111.3 in January and 109.7 in December.
Significantly, the proportion of consumers who think their household finances have worsened over the last month is at its lowest level since YouGov started measuring it in 2009. In February, 17% of thought their household finances had deteriorated over the previous 30 days, compared to 20% in January and 21% in December.
However, it is the case that consumers are becoming less pessimistic about their household finances rather than more optimistic. Only 10% of households say their finances have improved over the past month, while fully 90% feel it they have either not changed or got worse.
Source: YouGov/Cebr HEAT data, February 2015
Stephen Harmston, Head of YouGov Reports: ‘It has been a long time coming but it looks like falling prices and rising incomes have started to seep through to people’s wallets. While consumer confidence is increasing in the run up to the election and more households are now reporting an improvement in their finances, nine in ten still aren’t feeling the financial benefits of the recovery. This situation is likely to provide a key battleground for the parties over the next few months. While David Cameron will look on the overall increase in consumer confidence positively, it remains to be seen whether it will make enough of a difference on polling day.’
Charles Davis, Director at the Centre for Economics and Business Research: ‘Pay growth has been running ahead of inflation for a while now and this is only likely to continue as we expect inflation to dip into negative territory in March. Improving confidence and a reduction in the numbers who see their household finances worsening is a clear sign that more consumers are starting to feel the benefit of faster growth in the wider economy. However, there is still a sense of uncertainty around the election and the government – whatever its form – further deficit reduction strategy that will follow.’
Find out more information about the Household Economic Activity Tracker
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