LONDON (Reuters) - British consumer confidence rose in September to its highest in almost six years, signalling further strength for one of the economy’s main drivers, a survey showed on Friday.
Market research company GfK said its monthly consumer confidence index rose to -10 from -13 in August. It was the highest reading since November 2007 and above the consensus forecast in a Reuters poll for -11.
Data on Thursday showed Britain’s economy grew at its fastest pace in three years in the second quarter but a fall in business investment raised some questions about how long the recovery would continue at that pace.
“Whether the current economic recovery is real or will prove to be a credit-fuelled bubble, this continuing steady growth in confidence looks like good news for the government,” said Nick Moon, managing director of social research at GfK.
Moon pointed to concerns about underlying weakness in Britain’s economy.
“The consumer confidence conundrum continues. In the same week that figures from ONS (Office for National Statistics) show that UK productivity is lower than every G7 country except Japan, the consumer confidence barometer has taken another clear step upwards,” Moon said.
September’s reading is well above the 12-month average of -22, suggesting consumers - who account for around two-thirds of British spending - will make another big contribution to economic output in the third quarter.
While survey respondents said they saw no improvement in their personal financial situation in September, they had a more positive outlook on the year ahead thanks to their steadily improving view on the economy as a whole.
Economists at Capital Economics said after Thursday’s GDP data that rising property prices could help encourage consumers to spend more despite weak growth in their wages.
“The pressure on real earnings remains a persistent headwind, but with stronger balance sheets and a ‘feel good factor’ from the recovery in the housing market, consumers should continue to increase spending at a modest rate,” they said in a note to clients.
GfK polled about 2,000 people from August 30 to September 16 on behalf of the European Commission.
Reporting by Hugh Lawson; Editing by Toby Chopra