Double-dip fears wane as consumer confidence lifts
The prospect of a double-dip recession may have been held off after consumer confidence in the British economy improved in August for the first time in five months, a research group said today.
The Gfk NOP Consumer Confidence Index increased this month by four points to minus-18 - the first time Gfk NOP saw an increase since February.
Confidence was lifted across the survey, including improvements in confidence in personal finance situations in the previous and forthcoming 12 months, as well as confidence in the general economy.
Nick Moon, managing director of Gfk NOP Social Research, said: "Overall, consumer confidence has been in constant decline for the last five months and a further fall would have made a double-dip recession seem a very real prospect. The Government will undoubtedly read these figures with a great deal of relief."
But Mr Moon said the gain merely reverses a similarly large drop in consumer confidence in July - and remains at a level similar to that in May 2009, when the country was deep into the recession.
The survey comes after official figures from the Office of National Statistics showed a 0.7% increase in consumer spending between April and June - compared with a fall of 0.1% in the previous three months - boosted by World Cup sales of food, drink and televisions.
But economists warned the levels of spending were not likely to grow at a similar rate as fierce austerity measures laid out by Chancellor George Osborne's June Budget kick in.
Last week, a survey from accountancy body ICAEW and accountants Grant Thornton indicated that a fall in confidence among firms in the UK would slow down the economic recovery in the second half of the year.
It revealed nearly a fifth of businesses now feel less confident about the coming year than they did during the second quarter.
The emergency Budget, which set out a range of tax rises, and the looming spending review had taken its toll on firms' confidence.