October also saw sentiment increase eight points towards the UK’s economic situation from last month, to 283 points, showing an improvement in confidence towards the UK economy ahead of the Autumn Statement, while sentiment towards the current situation climbed 10 points to 186.
For categories of essential spend, the continued decline in petrol prices has seen average spending on fuel around 6% lower than this time last year, helping to ease the pressure on budgets and bolster household incomes. Among other categories, warmer conditions earlier in the year resulted in lower energy usage, which is still helping to keep gas and electricity bills low at around 5.5% lower than this time last year.
Patrick Foley, Chief Economist at Lloyds Bank, said:
“Consumers remain in a positive mood, with the pressure on budgets from essential spending lifting a little. Though risks around the economic outlook have risen somewhat, emerging signs of a modest strengthening in real wage growth should help support the UK recovery.”
Consumer sentiment towards the country’s financial situation declined in October with the balance of opinion at -36%, despite an increase of 22 percentage points from this time last year. Greater London continues to be the most positive region with an increase from -12% to -9%. A decrease in opinion of 13 percentage points across Yorkshire and Humberside makes it the least positive region at -53%.
Feelings towards the housing market continue to remain broadly stable since June with a balance of -14%, an increase of four percentage points since this time last year, which is consistent with the easing of price growth and cooling of market conditions that has been seen in recent months. Greater London is one of the most positive regions, standing at -10%, which is similar to that of this time last year (-12%), however the region remains lower than in the early part of 2014, when it reached its peak in January at 9%.
Attitude towards the current employment situation saw a six point increase in October to -20%, suggesting that sentiment is returning to the upward trend noted in August of -18%. There has also been a 34 percentage point increase in sentiment compared to this time last year. This can be attributed to further job creation and emerging signs of wage growth, which is picking up. There has been an increased improvement across all regions apart from Yorkshire and Humberside, which is now the most negative region (-44%).
Greg Coughlan, Director of Personal Current Accounts at Lloyds Bank said:
“The improvements we have seen from last month is a positive sign for all consumers, especially in the lead up to Christmas where finances are often stretched. The continued improvement in individuals personal finance situations, shows that consumers are having more confidence in their own finances.”
The balance of opinion on future discretionary income between those feeling they will have more versus less money in the next six months remains stable since July at 6%, increasing 11 points from this time last year. Depsite the balance tipping positively, over half of people (55%) think there will be no change in their discretionary income levels. From being the most negative region in September, the North East saw a 17 point increase in October to 10%, making it now one of the most positive regions after East Midlands and Greater London (13%). Those in the South West were the most negative at -8%.
Consumers continue to have a positive sentiment towards future saving with a balance of 14%.
