Confidence reaches its highest level for five months in January

by Aaron Strutt

Feb 17 2012

After ending 2011 close to all-time lows, consumer confidence staged a modest recovery at the start of 2012, picking up by nine points to 47.

According to Nationwide Building Society's Consumer Confidence Index for January, confidence remains subdued by historic standards. Their Index for January is almost 30 points below the long-term average.

Robert Gardner, Nationwide's chief economist, said: “Given the challenging economic backdrop, with the UK economy contracting in the final quarter of 2012 and the unemployment rate rising to its highest level since 1995 in recent months, the improvement may prove to be a little more than a temporary bounce.

“However, a number of other economic indicators have also surprised and been more positive than expected in recent weeks, which may be an indication that underlying economic conditions are not as weak as feared.”

Consumers expressed a greater propensity to spend on household goods in January with 40% of people believing it to be a good time to buy. This is up from 31% in December and has now reached its highest point since the introduction of the 20% VAT rate a year ago.

February 17, 2012