Insights

UK consumer confidence hits highest level for seven years in Q3
Report

UK consumer confidence hits highest level for seven years in Q3

Positivity about job prospects also at seven year high

Proportion of consumers willing to spend money at highest level for eight years

Proportion of consumers who believe UK is in a recession at lowest point on record

In Q3 2014, consumer confidence in the UK jumped three points for the third successive quarter to reach an index of 93, its highest level for seven years.  The last time it was higher was in Q3 2007 (94), when Gordon Brown had just become PM and MySpace was more popular than Facebook.  A score above 100 indicates degrees of optimism – below 100, degrees of pessimism.

The score is derived from Nielsen’s Global Survey of Consumer Confidence and Spending Intentions. Established in 2005, it measures attitudes on topics including job prospects and personal finances each quarter among 30,000 internet consumers in 60 countries.

The findings show that the number of Britons:

  • Feeling positive about their job prospects increased for the sixth consecutive quarter to 41% in Q3 2014 – the highest level for seven years (Q3 2007, 50%)
     
  • Believing the UK is in a recession dropped 4 points from the previous quarter to 56% – the lowest level since the question first appeared in the survey (Q1, 2008)
     
  • Feeling that now is a good time to make purchases rose 2 points to 42% – the highest level for eight years (Q3 2006, 44%)
     
  • Who say they’ve changed spending habits to save money stayed at 58% – still the lowest level since the question first appeared in the survey (Q1, 2009)
     
  • Feeling positive about their personal finances stayed at 47% – still the highest level for seven years (Q3 2007, 54%)

“Confidence is moving in the right direction, but the fact remains, as a whole, Britons are still pessimistic about what’s ahead,” says Nielsen UK managing director Steve Smith. “Those positive about jobs and finances are in the minority, while cost-saving tactics are still being practised by the majority of households. For instance, 60% of shoppers are buying cheaper grocery brands to save money – the highest figure for two years – and savings remain the number one destination for consumers’ spare cash.

“This cautious mind-set is contributing to weak retail sales growth, so any UK recovery will remain fragile until more shoppers get a tangible sense that their living standards have improved.”

The global Consumer Confidence Index stands at 98, Europe at 78. India has the highest index (126) among the 60 countries measured, Italy the lowest (47). UK confidence levels (93) are the closest they’ve been to Europe’s biggest economy, Germany (97), for over four years (Q2 2010, 78 vs 81).

To show historical trends for the UK and all 60 countries, broken down by metrics such as financial concerns and job prospects, visit the interactive Nielsen Global Consumer Confidence Trend Tracker.