UK consumers defy MPC / consensus gloom
Friday, May 27, 2011 at 11:25AM
Simon Ward

The EU Commission UK consumer confidence index recovered strongly in May, supporting the suggestion of an improving consumer outlook in a post a month ago and a follow-up earlier this week. The index, which summarises consumer views on the economy, their own financial prospects, saving and unemployment, rose to its highest level since August, though remains below its long-run average (-14 versus -10).

Particularly notable was a large fall in the percentage of respondents expressing concern about the labour market, suggesting that the economy is continuing to create jobs and casting doubt on forecasts of a renewed rise in the official unemployment rate – see chart. Hiring expectations in the companion EU Commission business surveys are also consistent with rising employment.

As well as an improving labour market, consumer spirits may have been lifted by:

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