Consumer confidence has hit its highest level since October 2009, according to research firm GfK's closely watched barometer of sentiment.
The managing director, Nick Moon, said the recovery in confidence represented a "conundrum of Alice in Wonderland proportions" as shoppers chose to focus on better economic news rather than declining real incomes. Its barometer rose to minus 13, the highest level for almost four years.
The news came as the recruitment company Hays said the jobs market was making a comeback, with sectors such as construction boosting sentiment "from London to Leeds".
The British Chambers of Commerce added to the economic cheer by upgrading its growth forecasts for this year to 1.3 per cent, although it warned that the recovery "was not yet secure".
"Although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks," its director-general John Longworth said.
There was more good news from the US, which lifted second quarter growth estimates from an annualised 1.7 to 2.5 per cent after higher exports. This may persuade the Federal Reserve to slow its stimulus programme next month.
- More about: