Consumer confidence in the UK has reached new highs in 2014, the Lloyds Bank Spending Power Report has revealed.
In the lead up to the festive season, a score of 154 was recorded – the highest ever since the index begun while all indices suggest an upwards trend.
Sentiment towards the UK’s economic situation is also up to 295 points – up 12 points month-on-month and 79 points annually. People are more confident in the current situation than they were, while thoughts towards the future have remained static.
Essential spending down
Spending on essential items has fallen throughout 2014, driven by falling petrol prices and utility costs.
Petrol prices are 6% lower compared to the same time last year, with consumers spending around £69 less on average. Gas and electricity bills have also decreased by 6%, providing a saving of around £80 on average – an overall household saving of around £150 per household.
Temperatures in 2014 have also been warmer than usual and this has helped to keep bills low as there is less reliance on heating systems. Overall this means there is an improvement in the levels of disposable incomes that are available for many families, with growth expected to continue through 2015.
The current situation
Public opinion towards the current situation has also improved by six percentage points although it is still negative overall.
A 23 point rise has been noted since November 2013, while London was the most positive region in the country.
Opinions towards the housing market are also on the up although there was widespread variation in the scores noted across the UK. The employment situation has also seen improvement according to the report, jumping 32 points from a year ago.
Sentiment towards consumers’ own financial situations is at an all time high since the survey began in 2011; jumping eight points month-on-month and 14 from a year ago.
The majority of consumers believe they will have a similar amount of money in the future as they do now, while 23% think they will have more.
Just 17% fear they will have less although views varied massively across the UK – those in Greater London were nearly three times as positive as those in Northern Ireland.
Sentiment towards future saving has fallen slightly, although the opportunities to put some money away are increasing with every passing month.
Viewpoints have become more positive on a steady basis throughout 2014 and it is felt the situation will continue to improve in the months ahead.