Consumer gloom lifts but little sign of rush back to shops

The GfK UK Consumer Confidence Index showed an improvement by five points to a score of minus 22, adding to hopes of a much-needed boost in spending for the economy.

It builds on an upward trend for the index, which has risen from minus 29 at the start of the year.

Nick Moon of researchers GfK, said: “There are now some real signs that consumers, while hardly confident, are moving out of the feeling of despondency that the country has been mired in for the last year or so.”

He pointed out that the index remains lower than it was for the whole of 2010 and well off pre-recession levels.

“We may be climbing out of the pit of economic pessimism, but there’s a long way to go until the public becomes neutral, let alone positive,” he added.

Sales figures from department store chain John Lewis showed a 4.2 per cent increase year-on-year in the week to May 25, while Waitrose saw a rise of 5.7 per cent.

Howard Archer, UK economist at IHS Global Insight, said consumer confidence had been boosted after the UK avoided a triple-dip recession, with gross domestic product (GDP) growing by 0.3 per cent in the first quarter.

But there was no guarantee this would mean consumers spending more and the modest rise in John Lewis sales showed people were not rushing back to the shops yet.

The John Lewis sales increase stood at just half the overall growth rate for the store in the 17 weeks to May 25.

Mr Archer said: “Clearly, how much consumers spend over the coming months is crucial as to whether the economy can build on the 0.3 per cent quarter-on-quarter growth achieved in the first quarter, and the prospects for this look mixed.”

The British Chambers of Commerce has just upgraded its forecast for growth in gross domestic product this year from 0.6 per cent to 0.9 per cent, and increased its longer-term outlook for the first time since before recession.

Earlier this week, latest CBI figures showed that the high street remained under pressure as sales plunged at their fastest pace in more than a year.