Consumer confidence jumped in May thanks to the strength of the pound, low inflation and rising wages, but shoppers remain cautious about the future.
According to new data from Lloyds Bank’s latest Spending Power Report, people were feeling more positive in the short-term, with the overall index rising five points to a new high of 160 points.
Low levels of inflation, which stands at 0.1% after falling into negative territory in April, have boosted household spending power and led to a 2.7% rise in wages, contributing to the optimism.
However, Lloyds told the Daily Mail that confidence in the future had fallen for the third consecutive month to its lowest level since August 2013.
Claire Garrod, head of personal current accounts at Lloyds Bank, told the newspaper: “Short-term spending power confidence has surged in May with less uncertainty after the election, low levels of inflation and strengthening wage growth. These factors are contributing to people feeling like their money is going further this month than last. However, confidence towards finances in the longer term has recently fallen, suggesting that people retain a cautious view of the future.”