Misery Index at best in 3 years as confidence and economy grow more than expected
Today’s news that the UK economy grew by 0.3% in Q4, up from 0.1% in the preliminary estimate, together with consumer confidence up by more than an expected 3 points will make welcome news for the Chancellor as he prepares the pre-election Budget. In addition indications from the latest bank results suggest that impairments may have peaked.
The GfK NOP February Consumer Confidence Barometer (CCB) undertaken for The European Commission rose to –14, up from –17 in January to its highest since last October. A year ago confidence stood at –35. Increasing optimism about the economy is the main driver, despite recent worries over a double dip recession and the threat of a default in Greece spreading sovereign debt contagion across Europe. Women’s confidence rose 6 points in the month to –14, one point lower than men’s confidence –13.
Of the other sub-indices comprising the CCB, both forward and backward looking measures of household finances edged higher. People are cautious about the spending climate – the measure is unchanged for the third successive month. Spending intentions on major household goods items fell back suggesting the retail climate will remain tough.
Despite the sharp spike in inflation and in the claimant count measure of unemployment in January, both unemployment and inflation expectations improved in February. The JGFR Misery Index, a combination of the two measures improved to record its best score in 3 years, up 8 points on January and 18 points on a year ago and well below its long-term average.
For a full round up of the consumer’s savings and spending intentions subscribe to the monthly UK Consumer Confidence Monitor, out on March 3rd.
Details: John Gilbert 0208 944 7510 / 07740 027968 or firstname.lastname@example.org