Consumer confidence hits three year high

Consumer confidence in Quarter 3 has reached its highest level in three years according to the latest Deloitte Consumer Tracker. 

According to the research Consumers’ confidence regarding their disposable income, level of debts and job progression has all increased.

Overall consumer confidence is three percentage points higher than the same time last year, and 13 points higher than the third of quarter of 2011, when the Consumer Tracker first began.

The biggest rise in positive sentiment was in household disposable income, which improved by 7 points year-on-year (from -25% in Q3 2013 to -18% in Q3 2014).

Spending on essential items declined for the third successive quarter, allowing consumers to switch more of their spending to discretionary items.

Ian Stewart, chief economist at Deloitte, said: “Even without in real incomes, consumer confidence has continued to rise. Lower oil prices and commodity prices and a strengthening pound have led to a sharp decline in inflation.

“An improving jobs market and lower inflation have been a real tonic for UK consumers. With inflation on a declining path and earnings heading up, the scene is set for a recovery in real incomes around the turn of the year.”