A Realisation About Consumer Confidence in the UK Economic Recovery

The value of retail sales in the UK was 1.8% higher in September this year than September last year, and the volume of those sales was 2.4% higher. This comes after rises of 1.6% and 2.7% in August this year compared to August last year.

Obviously this is a clear sign that the UK economy is in recovery, but it brought me to a realisation. In the last few months I have started going out and spending more freely on toys for the kids and non-essential items.

Though I hadn't consciously thought about it, now that I am it occurs to me that this was because my confidence that the worst of the downturn was over has been growing as I read positive reports. I wasn't alone; the Nationwide Consumer Confidence Index for September read:

• Consumer confidence rose by six points to 71 in September.
• The Expectations Index increased by nine points to 106 in September.
• The Spending and Present Situation indices increased to 102 and 19 respectively in September.

And in August:

• Consumer confidence rose by two points to 63 in August.
• The Expectations Index increased by three points to 94.
• The Spending Index increased by one point to 97.
• The Present Situation Index increased by one point to 17 in August.

Based on this new realisation it occurs to me that one of the most important indices to tell the short-term future of an economy is consumer confidence indices. This is probably a common theory, but as I hadn't read it before I felt the need to share my feelings.

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