Consumer spending rises to nine year high

Consumer confidence has risen to its highest level since 2006, according to recently released data from market research company, Nielsen.

Job prospects are rising and inflation is at a record low, leading to increased confidence in personal finances. The Nielsen Consumer Confidence index hit 97 during the first quarter of this year, its highest since 2006 when it reached 101, and ten points higher than at the same time last year.

The proportion of households feeling that now is a good time to spend rather than save was also up, reaching 45 per cent in April, the highest figure since records began in 2006.

Nielsen’s managing director, Tony Steve Smith, said that the rise in consumer confidence was due to the fact that unemployment is falling, inflation is at zero and people are enjoying lower prices in supermarkets and at petrol stations. The UK is one of the world’s fastest growing economies and the increase in consumer confidence reflects this.

Nielsen’s survey questioned 500 people in the UK and found that the number of people feeling more positive about their job prospects has also risen to 45 per cent, its highest level since 2008.

A second survey, conducted on behalf of Asda, showed that the average UK household had an extra £17 per week to spend on luxuries during April, indicating that household finances are continuing to improve.

The Asda income tracker revealed that average household disposable income has risen by ten per cent, to £187, due to increased employment, rising wages and low inflation. Gas and electricity, food and non-alcoholic drinks are almost three per cent cheaper than they were 12 months ago.

Asda managing director, Andy Clarke, said that this is the first time he has ever seen essential item deflation during thirty years in retail.