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Consumer confidence up in Q4 2010

Consumer confidence rose in the final quarter of last year as consumers felt more positive about job prospects and their personal finances.

A “less negative” feeling towards spending also helped drive the British Retail Consortium and Nielsen Consumer Confidence Index up two points to 77, compared with the previous quarter.

The number of respondents who thought job prospects would be ‘excellent’ or ‘good’ in the coming 12 months rose two percentage points to 22%, while the number of people who believed that their personal finances will be ‘excellent’ or ‘good’ in the coming year increased one point increase to 35%.

There was a six point drop in the number of people saying they thought now was a ‘bad’ time to spend.

However, more than a quarter (27%) of shoppers said “they have no spare cash” in the final quarter of last year. This is a six percentage points rise, year-on-year, and the highest since the survey began in 2005.

Fewer people said they were spending disposable income on holidays, clothes, home improvements and new technologies.

Increasing utility bills are the biggest concern for consumers, overtaking the economy.

BRC director general Stephen Robertson said: “I’d be surprised if this modest improvement in sentiment lasts. With Christmas coming, many people put their concerns to one side. Worries about jobs and money may briefly have seemed a bit less pressing. The impending VAT rise certainly made people less pessimistic about buying larger items.

“But the signs are that this boost hasn’t survived the extreme weather, VAT rise and revival of nervousness about spending cuts.

“A significant and permanent strengthening of consumer confidence is clearly some way off.”

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