Weather brightens consumer optimism
Consumer confidence raced ahead during May as the warmer weather and recent run of bank holiday weekends left people feeling more upbeat.
The Nationwide Consumer Confidence Index registered one of its biggest-ever monthly rises to stand 11 points ahead of its April figure at 55 - the highest level since December last year.
The index was boosted by people feeling more positive about the future prospects of the economy, while their confidence in spending money also increased.
Overall, the expectations index jumped by 17 points to stand at its highest level this year, while the spending index rose by a record 16 points to 79, also a five-month high.
But despite the improvement, people are still feeling significantly less confident than they were in May last year, when the overall Consumer Confidence Index stood at 64.
Robert Gardner, Nationwide's chief economist, said: "The warmest April on record, combined with the feelgood factor of consecutive bank holidays and the royal wedding, helped push up the Nationwide Consumer Confidence Index by 11 points in May.
"However, despite recording one of the biggest monthly jumps ever, the index still sits at 55, nine points lower than the same period last year and well below the historical average."
He added that underlying consumer sentiment remained "cautious", with people's optimism about the current economic situation edging ahead by just three points during May.
Around 64% of people still think the current economic situation is bad, while the same proportion feel there are not many jobs available.
But only 26% of people now think the economy will be in worse shape in six months' time, down from 39% in April, and 25% think the employment situation will have improved, although 56% still think there will not be many jobs available.
Around 27% of people think now is a good time to make a major purchase, such as a house or car, 7% more than in April, and 30% think it is a good time to buy household goods, up from 24% during the previous month.
Mr Gardner said: "It is too early to say whether consumer confidence is in a sustained recovery. There are still strong downward pressures, not least higher than hoped for inflation and continued concern around employment, while recent announcements of large domestic energy price hikes are likely to dampen consumer mood."
Percentage that think economy will be in worse shape in six months