Cheer over big jump in consumer confidence

The GfK NOP Consumer Confidence Index soared by 10 points during the month to stand at minus 21, the second biggest rise in the survey’s 37-year history.

The group said the “almost unprecedented jump” could be due to the feelgood factor following the Royal wedding and extended Bank Holiday weekends in April, as well as the recent let-up in negative reports about the economy.

But it cautioned that consumer confidence still remained deep in negative territory, while the index was also lower than in May last year, when it stood at minus 18.

The managing director of GfK NOP Social Research, Nick Moon, added: “We have seen an almost unprecedented jump in consumer confidence this month. But it should be pointed out that this is just one month’s figure and it is far too early to know whether this could be the start of an upward trend.”

The index measuring people’s attitude towards the outlook for the economy in the coming year rose by 15 points to minus 15, while there was also a 13 point increase in their confidence about the economic situation during the past 12 months, lifting this index to minus 44, one point ahead of where it stood in May 2010. Consumers also felt confident their own financial situation would improve, this index lifting by 11 points to minus three.

The data came after a warning the Government’s drastic deficit-reduction plans may have to be slowed if growth figures continue to disappoint.

The chief economist of the Organisation for Economic Co-operation and Development, Pier Carlo Padoan, said there was “scope for slowing the pace”.

It now predicts GDP will grow at 1.4 per cent in 2011, downgraded from the 1.5 per cent it forecast in March.