Consumer confidence best in two years as recession ends

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The consumer confidence index from Nationwide rose for a second month to reach 80, its highest figure since January 2008 and nearly double its level from a year ago.

The group's expectations index showed there was more economic optimism as well, hitting its highest level since it was set up in May 2004.

The proportion of people who think the economy will be in better shape in six months rose to 39% in February, while only 43% of people think there is a jobs shortage coming up, the first time the figure has dropped below 50% since September 2008.

Consumers also feel upbeat about their own financial situation, with 88% expecting their household income to be the same or higher in six months.

The group's present situation index climbed to its highest level since December 2008, as people felt more positive about the number of jobs available.

Martin Gahbauer, Nationwide's chief economist, said: "Following a small dip at the end of 2009, consumers have started this year in a more optimistic fashion with February's figures showing a surge in confidence in both the present and future situation.

"A strong influencing factor behind this uplift is likely to be the news that the UK has come out of its longest recession on record following six consecutive quarters of contraction beginning in 2008."

Consumers continued to rein in their spending. Only 30% think it is a good time to make a major purchase such as a house or car.

The group said this fall in confidence may have been driven by the removal of government schemes such as the stamp duty holiday and the reduced rate of VAT.

However, people expect the value of property to rise by 1.5% in the coming six months, up from predicted gains of 1.1% in January.