Brits remain confident over economy

21 July 2014

Confidence among British consumers fell slightly in June but the general outlook remains positive as the costs of essential goods continues to fall, a new survey published today has revealed.

The Lloyds Bank Spending Power report showed a consumer confidence score of 145 points in June, down marginally from 146 in May, which was the highest recorded score since the survey began in November 2010.

According to the latest results, average spending on gas and electricity had fallen by 2.5% in the past twelve months, while the cost of fuel stands around 5.5% lower than it did a year ago. Overall spending on essentials has remained stable, at around 1% higher than in June 2013, easing the pressure on consumers' wallets.

Regarding personal finances, consumer sentiment remains positive despite there being a slight decline of four percentage points since May, with a positive score of +14%.

Continued gains

Patrick Foley, chief economist at Lloyds Bank, said: "Notwithstanding a modest easing in confidence, the economic backdrop for consumers remains positive, particularly so in light of continued gains in employment.

"Meanwhile, limited pressure on consumer wallets from essential spending also helps support consumers' capacity to undertake discretionary spending in the months ahead."

Consumer sentiment towards the UK's financial situation also improved in June, with the balance of opinion standing at -30%, an increase of two points on May's figure.

However, regionally there is a difference on the economic outlook. Perhaps unsurprisingly those in greater London are the most positive about the economy with a score of -2%, an increase of 12 percentage points on May. This is in contrast to those in Scotland, who recorded a score of -46%.

Sentiment towards the housing market has fallen eight points to -12% in June but this still represents an improvement of 26 points on the same time last year.

A stable 2014

Philip Robinson, director of personal current accounts at Lloyds Bank, added: "With a firm improvement in consumer confidence throughout the course of the year, despite the slight dip seen this month, customers can take comfort in what continues to be a stable 2014.

The Spending Power report (and consumer confidence scores) is derived from interviews with over 2,000 consumers every month, who are asked about their current and future spending habits and how their commitments affect their spending power.

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