Survey suggests the return of consumer confidence

A new report from the European Commission has suggested that consumer confidence is experiencing an upswing despite the adverse economic conditions that have followed the events of 11 September.

The survey revealed that optimism in the economy has returned – but only to a certain extent, with confidence levels rising by two points, but still remaining in negative territory.

October saw optimism plunge to –5 on the EU scale, confirming a downward trend of fear until November’s small reversal. However, despite the outward appearance of being a gloomy time, most respondents said they believed that the current time was an excellent one to make new purchases and consolidate their financial standing. In addition, most Britons said they felt assured that their financial status would approve over the coming year.

However, despite rising levels of consumer confidence the CBI has predicted a painful year ahead for British businesses even if the UK manages to avoid a fully-fledged recession.

Ian McCafferty, CBI Chief Economic Adviser, commented: “The real pressure will be on businesses that are exposed to the international environment, which will exacerbate the two-speed economy.

“However, the UK is still the fastest growing of the G7 countries and is well placed to weather the storm. We should see the economy start to rally towards 2003, but the strength of this relies heavily on the timing and momentum of the recoveries in the US and Europe.” (CL)