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Green shoots finally appear as consumer confidence increases
Paul Waugh30 Apr 2009
Hopes that Britain may be emerging from the worst of the recession were boosted today as a new poll showed the public is more optimistic than at any time since the credit crunch began.
Consumer confidence rose for the third month in a row and shoppers are now more bullish about the recovery than at any time since August 2007, when Northern Rock collapsed.
The GfK NOP poll found that the index measuring overall consumer expectations was still negative, at -15, but had jumped 16 points since last month.
The monthly snapshot of opinion suggests that despite the dire projections to emerge from the Budget, a combination of cheaper mortgages, low inflation and tax cuts are improving the spending power for those in work.
The Treasury and Downing Street will be heartened by the figures, which offer a glimmer of hope that an economic recovery may be under way in time for the general election next spring.
Unemployment is still set to rise, but for those in City jobs there was a further sign that they are riding out the downturn. Separate figures showed bonuses in the Square Mile and Canary Wharf have come close to £7 billion — less than half that of a year ago, but big enough to trigger criticism.
The Government has been battered in recent weeks by dismal figures on jobs, housing and growth.
But with the FTSE at its highest since February, the GfK NOP poll points to tentative green shoots in the economy. Britain will depend heavily on US recovery and last night America's central bank, the Federal Reserve, suggested the worst recession of the post-war era may be past its nadir. It predicted “a gradual resumption of sustainable economic growth”.
The Chancellor continues to point to evidence that Britain is not suffering as badly as other economies. Berlin announced yesterday Germany's economy will contract this year by six per cent, far worse than the 3.5 per cent contraction projected for Britain. Alistair Darling told the Commons he was confident that his fiscal stimulus was “having an effect”.
The Gfk NOP consumer confidence index, carried out on behalf of the European commission, also showed voters were less gloomy about the state of their own personal finances, on which the index rose from -6 to -3.
Rachael Joy, of Gfk NOP, said: “Significantly, this is the third consecutive month we have seen a rise in the index, suggesting a definite upward trend.
“This could be down to a combination of the simple belief things are improving, as well as the feelgood factor of improving weather following the Easter bank holiday.”
Analysis of preliminary pay data from the Office for National Statistics for the five months of the City bonus season to April suggests payouts will be between £6.5 billion and £7 billion, compared with £13.7 billion last year.
Lib-Dem Treasury spokesman Vince Cable said: “These figures are alarming and show a complete lack of awareness in the City of the extent of the crisis, their role in creating it and the extent to which they are ultimately answerable to the taxpayer.”
Reader views (6)
Well done Gordon Brown for initiaiting the measures that are seeing our economic revival take flight - Keith Price. That'll be the highest number of people put out of work in the whole of Europe and the highest debt run up by any goverment in Europe in recent times will it. Oh and also the £2,000+ annual rise in taxes on the way. You're always good for a giggle on a Friday morning Keith.
- Daveb, Manchester, 01/05/2009 09:34
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There is only one way out of a recession: stop talking and start spending.
- Scott Mcculloch, London, UK, 30/04/2009 17:56
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Well done Gordon Brown for initiating the measures that are seeing our economic reveval take flight both here and in the US under Obana
- Keith Price, Luton, England, 30/04/2009 16:35
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Rubbish. With all the debt around this is a 10 year haul, not an overnight resolution. Wake up, stop deluding yourselves.
- Dave Davies, Basingstoke, 30/04/2009 14:57
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Optimistic?I'm not.I'm positively suicidal.
- Steve, London, 30/04/2009 13:40
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Vince Cable for Prime Minister, Please? And by the way, who´s the Lib Dem Leader?
Such a pity they have not made it through. But the Tories? Please? What is their plan? Has anyone also heard about any good ideas on their behalf? The truth is that they also have no clue. David Cameron is not a PM stock as Brown certainly isn´t.
- Maria, London, 30/04/2009 11:20
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