LONDON (Reuters) - British consumer confidence has jumped in July to its highest in more than three years, a survey showed, in an early sign that the economic recovery is gaining steam in the third quarter.
Market research company GfK said that its monthly consumer confidence index rose to -16 from -21 in June. It was the highest reading since April 2010 and easily beat forecasts in a Reuters poll for -20.
The GfK survey, one of the first economic indicators on the July-September period, chimes with upbeat industry data on retail sales and factory orders over the past month.
It also follows news that Britain’s economy expanded 0.6 percent in the second quarter - double the pace of growth in the first three months of the year.
“There is now no doubt that consumer confidence has recovered strongly from the unparalleled trough of the last five years,” said Nick Moon, managing director of social research at GfK.
“It is the longer-term changes that mean far more than one single month’s figures, and the current trend is definitely upwards,” he added.
July’s headline reading is well above the average of -23 in the second quarter, feeding hopes that consumers - who account for around two-thirds of all spending in Britain - will boost the economy further in the third quarter.
All but one of the five measures that make up the overall index rose strongly, with consumers’ forecasts for their finances and the general economic situation the most optimistic in several years.
The climate for big-ticket purchases worsened, but only very slightly.
Donna Culverwell of GfK said hot and sunny weather during July helped lift consumer morale. Widespread discounts and offers are also likely to have brightened consumers’ mood, as shop prices fell in July at their fastest pace since January 2007.
GfK polled about 2,000 people from July 2 to 21 on behalf of the European Commission.