Consumer confidence gathers pace across UK: new figures
While consumers in London and the South East were found to be the most confident, the North of England, Scotland and Northern Ireland saw consumer sentiment about household disposable income jump six percentage points from -25% in the first quarter of 2014 to -19% in in the second quarter.
Across the UK, overall consumer confidence in the second quarter was four points higher than the same period last year. Sentiment about disposable income was up 11 points.
Deloitte said consumers indicated that they were spending less on essential items, but spending more on discretionary items like clothing and footwear, which saw a nine point improvement in the quarter.
The figures also reveal that more consumers started a job and fewer reported a loss or reduction of income.
Ben Perkins, Deloitte’s head of consumer business research, said: “Low inflation, or in some cases deflation, means that consumers are getting more for their money. Combined with the rising confidence in household disposable income, consumers are edging away from the defensive spending habits they adopted during the recessionary years and spending more on the things they enjoy.”
Looking forward to the third quarter of 2014, consumers indicated that they planned to spend more on non-essentials like electrical items, eating out and short breaks, as well as spending less on utilities. However, while economists forecast a rise in real earnings over the next year, the tracker shows that consumers are less optimistic.
Ian Stewart, chief economist at Deloitte, said: “We found half of working UK adults don’t think their salaries will increase in the next year. Such concerns, together with the forecast of higher interest rates, may explain why consumers have told us they are planning to repay more debt and save more in the next quarter.
“Over the next year, the question will be whether any rise in real incomes will be enough to counter the effect of potentially higher interest rates.”
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