Confidence grows but is still near all-time low

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The Independent Online

Consumer confidence grew for the first time in four months in September after people started to feel more "hopeful" about the state of the battered UK economy, according to an influential survey.

The Gfk Nop Consumer Confidence Index improved by one point to –30 points between August and September, providing a rare fillip to the Government and UK plc's prospects of avoiding a double-dip recession. But the index remains 10 points lower than in September last year and not far off its all-time low point in July 2008.

Nick Moon, managing director of Gfk Nop Social Research, said: "The index's one point rise this month is not statistically significant, but it is psychologically important as it halts the decline of recent months.

"In fact, despite growing fears about the global economy, British consumers are feeling a little more hopeful about the state of the home economy."

This is reflected in a four-point increase to –27 points in September from August on the question of whether the general economic situation will improve over the next 12 months.

Mr Moon said: "Their view on the general economic situation over the next 12 months is improving and there has also been a slight increase in consumers feeling that this is a good time for major purchases."

He added: "With economic growth effectively stalled at the moment, retailers would welcome more high street activity, although if consumers are buying German fridges and Japanese cars, this would create quite different problems for the UK economy."

The continued squeeze on household budgets was laid bare by Gfk's index on personal finances over the last 12 months, which was flat at negative 24 points between August and September.

That said, consumers' expectation their personal finances will improve over the next year rose by one point to –10 in September.