UK consumer confidence on the up

British consumer confidence continued to rise during June as people were buoyed by reports that the worst of the recession could be over, research showed.

The Nationwide Consumer Confidence Index reached 58 during the month, the highest level since October last year and broadly in line with the level in June 2008.

The improvement was driven by a rise in people's confidence about the future state of the British economy, with the group's expectations index reaching its highest level since the end of 2007.

Nationwide said it was the first time since the index began in 2004 that more people said they thought the economy would be better in six months' time than those who thought it would be worse.

Martin Gahbauer, Nationwide's chief economist, said: "During June, consumers' confidence continued to gradually increase - a trend which has been seen for the last three months.

"Recently, there has been much talk by industry commentators suggesting that the worst of the recession may be over, which appears to have fed into consumer sentiment.

"However, the strongest belief by consumers is that the economy will be the same in six months' time."

However, people continue to feel negative about the current situation, with 76% thinking the economy is currently in a bad state, while 68% think there are few jobs available.

Around 22% of people think there will be more jobs available in six months' time, but 54% expect unemployment to remain high, although this is the lowest figure since September 2008, suggesting sentiment is gradually becoming more positive.

Four out of 10 people think it is currently a good time to make a major purchase, such as a house or car, probably due to recent house price falls and the British government's car scrappage scheme.

People also feel more upbeat about the housing market, predicting prices will fall by only 0.6% during the coming six months, well down on predictions of a further 1.6% drop in May.