Consumer confidence has risen to its highest levels since July 2007 but new analysis from YouGov and Cebr shows that economic optimism in the capital is a year ahead of many areas of the UK.
The figures show that the level of consumer confidence in the North East is currently at the level London’s was in November 2012, highlighting the regional variations in the UK’s economic recovery. Consumer confidence in Wales, Yorkshire & Humber, the North West and West Midlands lags more than a year behind the capital, with Scotland and the East Midlands 11 months back.
YouGov and Cebr’s analysis also shows that for the first time since September 2010, the South East has edged ahead of the capital in terms of expectations for house prices over the coming year. The figures suggest that the sharp rise in expectations for the capital’s property market seen over the past 18 months has started to slow, having fallen six points from its November peak.
Stephen Harmston, Head of Syndicated Research at YouGov: “The recovery has very much been like the Hunger Games, with the capital and surrounding areas burgeoning while the regions wither on the vine. These figures reinforce the view that many areas of the UK are struggling for economic momentum while London and the South East reap the rewards of growth.
“There are signs that the seemingly inexorable rise in London’s property market is starting to be checked, with people’s expectations about rising house values flattening out since the start of the year. However, the property boom has now spread from the capital, with the South East now having the most buoyant outlook for the housing market over the coming year. Whether this will spread further afield into other regions remains to be seen.”
Charles Davis, Director at the Centre for Economics and Business Research: “London has driven the economic recovery up until now and the discrepancy in consumer confidence between the regions is startling. While growth in London has boosted the UK’s economic numbers as a whole, it has not boosted the outcomes in many areas meaning a lot of places are even further behind the capital than they were during the downturn.
“These figures suggest that the recovery is slowly spreading out from the capital – particularly to regions in close proximity like the South East and East of England. However, many regions are a long way behind the super-charged London economy. Consumers in the North East are still waiting to feel the full benefits of this recovery.”
Confident London leaves rest of the country in its wake
London continues to be the area of the UK with the highest consumer confidence (currently 7.5 points above the national average). Economic optimism throughout the rest of England trails London in a splatter pattern, with the areas furthest away from the capital having lower levels of confidence and consumers in commuter belt regions such as the South East and East having a more optimistic outlook.
Consumer confidence in the North East is currently at the level seen in London 19 months ago – in November 2012. Wales and Yorkshire & Humber are 14 months behind while the North West and West Midlands trail by 13 months. YouGov and Cebr found that Scotland and East Midlands have levels of consumer confidence experienced by Londoners in July last year while the South West, East of England and Northern Ireland are just eight months behind the capital. The South East trails by just two months.
Source: YouGov/Cebr HEAT data, June 2014, using a three-month rolling average
Is London’s property boom cooling off?
The data suggest that consumers believe that some of the heat will be taken out of the capital’s property market in the next year, with the levels of expectation for house price growth being steady for the third successive month. Furthermore, the index showing expectations for house values over next 12 months is higher in South East (174.0) than London (173.2) – this is the first time this has happened since September 2010.
Source: YouGov/Cebr HEAT data, June 2014, using a three-month rolling average
YouGov/Cebr Consumer Confidence Index
YouGov/Cebr’s Consumer Confidence Index has risen to its highest level since July 2007 and now stands at 114.5. While this represents an increase of 11.6 points in the past 12 months, the month-on-month increase is the smallest since since February this year.
Source: YouGov/Cebr HEAT data, June 2014, using a three-month rolling average.
Notes: Axis value of 95.1 represents the average HEAT Consumer Confidence measure since the data set began in 2007
Look here for more information about the Household Economic Activity Tracker
Image from iStock
