U.K. Consumer Sentiment Rises to Highest Since Northern Rock RunJennifer Ryan
Consumer confidence rose to the highest level since the near-collapse of Northern Rock Plc triggered the credit crisis in Britain more than six years ago.
A consumer-sentiment index by GfK NOP Ltd. rose 6 points to minus 7 in January, the most since September 2007, the London-based research group said today. The median forecast of 20 economists in a Bloomberg News survey was for a one-point increase to minus 12.
The U.K. economy had its strongest growth since 2007 last year amid a strengthening housing boom, capping a rebound from a slump that started with the run on Northern Rock, the first on a bank in the U.K. for 140 years.
“All this is good news for the government as the election starts to get within sight,” Nick Moon, managing director of social research at GfK, said in the statement. “Growing confidence should manifest itself in greater spending.”
A measure of Britons’ assessments of the general economic situation in the past year rose 6 points to minus 20, and an index on their outlook for the coming year rose the same amount to 2. A gauge of their past personal financial situation rose 4 points to minus 12, and a measure for the future rose 6 points to minus 3. A year ago, all five indexes were negative.
The economy expanded 1.9 percent last year, though with output below its pre-recession peak, Bank of England Governor Mark Carney has indicated he’s in no hurry to raise Britain’s record-low benchmark rate. “Although a few quarters of above-trend growth driven by household spending represent a good start, they aren’t sufficient,” he said in Scotland this week.
Prime Minister David Cameron needs a consumer revival to win a second term in May next year. The opposition Labour Party, which leads the Tories in opinion polls, sRIFays ordinary voters squeezed by soaring energy bills and stagnant wages aren’t feeling the recovery.