UK consumer confidence bounces back to record high
19 October 2015
- Consumer confidence rises to a record high in the third quarter of 2015
- Rising wages and job security are key drivers for national confidence
- Saving at lowest level for five years; increasing borrowing is boosting spending
UK consumer confidence bounced-back to a record high in Q3 2015, according to the latest Consumer Tracker from Deloitte, the business advisory firm. The quarterly survey of 3,000 UK consumers also revealed that consumers have shrugged off the turmoil seen in the global financial markets during the period.
Consumer confidence rose by two percentage points to a four-year high, despite coinciding with a period that saw the FSTE 100 index fall by 700 points. All six measures of confidence in the Consumer Tracker were up from the previous quarter, with the biggest gains seen in relation to consumers’ level of debt, job opportunities and career progression.
Those living in London and the South East also recorded a resurgence in consumer confidence, following a fall in the previous quarter amid concerns about the weakness of the property market and the affordability of housing.
Ian Stewart, chief economist at Deloitte, said: “UK consumers seem unperturbed by financial market and emerging economy weakness that have dampened sentiment in the corporate sector. For consumers the good news on rising real wages and improving job security trump the bad news from the global economy.
“The Tracker also shows that more consumers are receiving pay rises or bonuses. Consumer firepower is being bolstered by a decline in savings and rising borrowing. Our polling reveals that consumers are saving less now than at any time in the last five years and that borrowing has risen through this year.
“Rising real incomes, more borrowing and lower levels of saving give UK consumers the wherewithal to keep spending. Household expenditure is set to remain the engine of UK growth over the next year.”
According to the Consumer Tracker, the gap between defensive and expansionary spending behaviour again widened in Q3 2015, for the second quarter in succession. The proportion of consumers displaying defensive behaviour fell to its lowest level since the survey began. At the same time, the proportion of consumers buying more items due to sales or special offers increased.
Ben Perkins, head of consumer business research, added: “Lower inflation in key categories such as food, utilities, transport and other essentials has reduced the pressure on consumers’ budgets.
“A weakening of spending in the grocery sector was particularly apparent. This can be attributed to competition between the big grocers and the discounters, which is continuing to drive prices down.
“The outlook is positive for the rest of the year. Consumers are planning to increase their spending on discretionary items in the fourth quarter of 2015. The leisure sector in particularly has profited from the falling cost of many essentials, as consumers are choosing to eat and go out.
“UK consumer businesses should be buoyed by the news that defensive behaviour has fallen to its lowest level since our survey began.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.