Consumer confidence up over economy
UK consumers shrugged off gloomy economic data and fears over the eurozone this month as a survey revealed a boost in confidence.
Market research firm GfK NOP said consumer confidence rose two points to minus 29 between April and May, as hopes for the next 12 months improved, but the negative figure still means overall sentiment among Britons is pessimistic.
The rise came as a surprise as official figures last week showed the recession is deeper than previously thought, with gross domestic product shrinking 0.3% in the first quarter.
The weaker UK figures were released against a backdrop of increasing financial turmoil in the eurozone, as fears heighten over a Greek exit from the single currency and Spain moves nearer to an EU bailout.
Nick Moon, managing director of social research at GfK, said: "The driver for this month's surprise rise in consumer sentiment is borne entirely out of how people view the future rather than how they feel looking back at the last year."
The index measuring personal finances over the last 12 months held at the same level, while it increased by four points for expectations over the next year.
The measure for the general economic situation of the country during the last 12 months dropped by a single point while expectations ahead increased by seven points.
However, the major purchases measure, when consumers are asked if they think now is a good time to buy big-ticket items, shrank by two points.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "Consumer confidence improved in May, which is both surprising and welcome news given the recent widespread headlines about the UK being back in recession and how the economy is at risk from developments in Greece and the eurozone."
Mr Archer said expectations that the rate of inflation in the UK will fall over the next 12 months could have been behind the improvement in confidence.