Consumers gaining confidence

Consumer confidence reached a two-year high during February as people were buoyed by news that the UK had pulled out of the recession.

Nationwide said its consumer confidence index rose for the second consecutive month in February to reach 80, its highest figure since January 2008 and nearly double the level it was at 12 months ago.

Optimism about both the current and the future economic situation increased in the month, with the group's expectations index reaching its highest level since it was first launched in May 2004.

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The proportion of people thinking the economy would be in better shape in six months' time rose to 39 per cent in February, while only 43 per cent of people thought there would not be many jobs available, the first time the figuredropped below 50 per cent since September 2008.

Consumers also felt upbeat about their own financial situation, with 88 per cent expecting their household income to be the same or higher in six months' time.

The group's present situation index also 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.

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"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."

But despite feeling upbeat about the economy, consumers continued to rein in spending.

Only 39 per cent thought it a good time to buy household goods, down from 45 per cent in January, while only 30 per cent thought it a good time to make a major purchase, such as a house.

The group said this may have been driven by the removal of Government schemes, such as the stamp duty holiday.

However, people felt slightly more upbeat about the housing market, expecting property values to rise by 1.5 per cent in the coming six months, up from 1.1 per cent in January.

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