UK consumer upbeat about rest of year

The index rose to 58 from 54 in May, compared to a reading of 59 in June last year. Consumer expectations for the economic situation in six months time were particularly upbeat. A third of consumers now believe that the economy will be better, compared to 28 per cent in May. But over half thought that there would not be many jobs available in six months time, compared to a peak of 67 per cent in January.

Only 15 per cent of households thought that their income would fall over the next six months with the broad majority (71 per cent) expecting it to stay the same.

Although expectations remained upbeat, consumers were decidedly more pessimistic about the current economic situation with three-quarters saying it was bad. And almost 70 per cent believe that few jobs are available at the moment.

Spending confidence is mixed. While 40 per cent of consumers think that now is a good time to make a major purchase such as a car or a house, 38 per cent think it is a bad time. But the number of consumers who believe that now is a bad time to buy household goods fell in June to 13 per cent from 17 per cent the previous month.

Martin Gahbauer, Nationwide’s chief economist, said: “Recently, there has been much talk by industry commentators suggesting that the worst of the recession may be over, which appears to have fed into consumer sentiment.”

“The strongest belief by consumers is that the economy will be the same in six months time. This expectation of a plateau in economic conditions has grown steadily over the last year,” he added.