Caution urged over rise in consumer confidence
Consumer confidence remains "seriously depressed" despite a surprise rise brought about by falls in inflation and energy prices, a survey revealed today.
Market research firm GfK NOP said consumer confidence rose four points to minus 29 between December and January to its highest level since June, after improvements in expectations for the economy and people's own finances.
The rise came as a surprise given the worrying state of the economy after a 0.2% contraction in GDP in the final quarter of 2011 fuelled fears of another recession.
The survey said recent falls in inflation, particularly utility bills, may have acted as a ray of light, while the score may also reflect a continuation of the festive mood after Christmas.
Nick Moon, managing director of GfK NOP Social Research, said: "Consumer confidence is still seriously depressed and we should treat this month's modest improvement with caution.
"Should February show another rise then we may be seeing signs that the gloom is dispelling - until then we should treat January's findings as good, but certainly not great, news."
He added that if the continuation of the Christmas feelgood factor had influenced the results then the same might happen ahead of the London Olympics.
But any gains surrounding one-off events tended to be temporary, he added, pointing out that a similar rise ahead of the royal wedding had quickly petered out.
The survey revealed that people's hopes for the economy over the next year had increased eight points to minus 33 between December and January.
And perceptions of their personal finances over the past 12 months and their hopes for the next year had also improved.
The climate for major purchases also slightly improved both on December and a year ago to minus 22 in a rare piece of better news for beleaguered retailers.
The survey was conducted for the European Commission.