Consumers are less downbeat, research shows
Consumer confidence in the UK rose for the first time in four months during December as people felt slightly less pessimistic about the future of the economy and the jobs market, new research has indicated.
The Nationwide Consumer Confidence Index stood at 53 at the end of December, up from just 45 in November, but still 24 points lower than it started the year.
There was an improvement across all three measures of confidence in the month, but the main gains were seen to the expectations and spending indexes, with people's confidence in the present situation edging ahead by just three points to 24.
The expectations index jumped by 12 points in the month, but the improvement was largely driven by people feeling less pessimistic, rather than more optimistic, about the future economic and jobs situation.
The research recorded a 6% fall in both the proportion of people who thought the economy would be worse in six months' time and those who thought there would be few jobs available in six months' time, while the number of people who thought the situation would be better remained broadly unchanged.
The spending index jumped by 10 points in the month, with 43% of people saying they thought it was a good time to buy household goods.
But Nationwide pointed out that this was likely to reflect the fact that VAT was increasing to 20% in January, and warned there could be a reversal in people's confidence about spending in the first few months of this year.
It added that despite the increase across all the measures of confidence, the three indexes still remained well below their long-run averages.
Robert Gardner, Nationwide's chief economist, said: "The December survey suggests that consumers were feeling a little more upbeat as we approached the New Year.
"This ended the pattern of three consecutive monthly declines that had been in place since the summer, and in the process stopped the index reaching the trough seen during the recession."
Mr Gardner added: "While the up-tick is encouraging, household confidence nevertheless remains subdued, reflecting ongoing uncertainty about the economic outlook."
People also remain pessimistic about the housing market, expecting house prices to fall by 0.9% in the coming six months, although this was slightly better than the 1.4% drop they were predicting in November of last year.