Above: Monthly consumer confidence figures charted by Trading Economics
Here’s a round-up of what people are saying in reaction to the news:
The Dismal Scientist sees the news in a very positive light, posting this on Twitter:
While SWIP linked the rise to increases in house prices on Twitter:
Elsewhere, Ben Chu in The Independent wasn’t sure the rise was indicative of a positive future, saying:
“Britain’s recovery is being powered by consumer spending, rather than exports and investment, raising doubts about the sustainability of this year’s solid economic upturn.”
According to a joint YouGov/Cebr survey, however, the rise wasn’t linked to a housing bubble, but rather can be attributed to increasing confidence in the job market:
Stephen Harmston, head of SixthSense at YouGov, explained the results further:
“Although a lot of the talk about the rise in consumer confidence has focused on the house price bubble, these figures suggest it is now also underpinned by a strengthening of the economic fundamentals.”
And it’s not just the UK where consumer confidence is rising, but Germany as well:
“Consumer confidence data came a day after the Ifo think tank announced German executives were also in a good mood and expected their businesses to thrive in the rest of the year,” according to Deutsche Welle.
However, the news isn’t as good across the pond:
In an article on Bloomberg News, the drop in confidence was attributed to worry over job prospects in the US:
So, despite some disagreement on what is causing it, consumer confidence seems to be on the rise, in Europe at least. What this means for the future is still very much up for discussion.
Here’s a final thought from Patrick Foley, chief economist at Lloyds Bank, as quoted in The Independent:
“With spending on essentials still relatively stable overall and positive coverage of the improving economic backdrop, the rise in confidence is not surprising, but very encouraging. It may in time embolden consumers to spend, so helping to underpin the wider economic recovery. In turn, such spending would further help improve the outlook for growth and jobs.”
What do you think is behind the rise in consumer confidence, and do you think it’s set to last?