British consumer morale touched its highest level in more than nine years last month as Britons became increasingly optimistic about the country’s burgeoning economic recovery, a survey showed on Friday.
Polling company GfK said its monthly consumer confidence index rose to +1 in June from zero in May, its highest since March 2005, albeit below a Reuters poll forecast of +2.
The survey suggested consumer spending will remain one of the biggest drivers of Britain’s swift economic recovery, as optimism about the economy over the next 12 months hit its highest level in at least 10 years.
“The next few months will be particularly interesting, since the previous venture into positive territory was merely transitory – two isolated months in January and March 2005,” said Nick Moon, managing director of social research at GfK.
“The last time the index was consistently positive was back in 2002 and this must be the next target from the government’s point of view as we get close to the election period.”
Consumers’ assessment of their personal financial situation over the next 12 months was the only component of GfK’s index to fall.
A separate survey on Friday suggested another major source of growth for Britain’s economy – the housing market – cooled slightly over the last month.
Data company Hometrack said house prices grew 0.3 percent in June compared with 0.5 percent in May, while only around a third of districts in England and Wales reported rising house prices, down from 50 percent two months ago.
“Pent-up demand has been feeding into the market over the last 18 months creating the upward pressure on house prices. This trend now appears to be running out of steam with no change in demand for housing over the month,” said Richard Donnell, Hometrack’s director of research.
The survey comes a day after the Bank of England imposed its first limits on how much most people can borrow to buy a home, in a bid to stem increasing levels of debt and rapidly rising house prices.
Hometrack said it expects the rate of house price growth to slow further in the coming months.