Consumer confidence on the increase

28-Aug-2007

Consumer confidence appears to have actually increased despite the recent problems experienced by global financial markets, the latest Lloyds TSB Corporate Markets Consumer Barometer has revealed, with first time buyers likely to be relieved that interest rate sentiment now seems to be turning.

The number of consumers predicting that interest rates will be higher a year from now has fallen to a six month low, the survey found, buoyed by inflation and strong economic growth.

Britons are also feeling more secure in their jobs, the barometer found, with the index recording a four per cent rise in sentiment month-on-month.

"The recent financial market volatility, coupled with July's encouraging inflation figures, has prompted economists to reign in their interest rate expectations and it seems like consumers have followed suit," commented Lloyds TSB Corporate Markets chief economist Trevor Williams.

"For the first time in six months we've seen a positive sign in consumer opinion that interest rates may finally have reached their peak in the current cycle," Mr Williams added.

Rates are currently at a six-year high of 5.75 per cent having been raised five times since last August.

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