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Consumer confidence increase good news for businesses

By CreditMan Monday, February 6, 2012

Edward Winterton, Bibby Financial Services’ executive director, commented on the rise in consumer confidence.

“The recent contraction of GDP for Q4 2011 has worried economists and businesses into thinking the UK could be falling back into another recession. Moving into 2012, new research from GfK NOP recorded an increase in consumer confidence between December and January – the report’s highest reading since June 2011. Although the rise in confidence is only marginal, it is confirmed by research from Bibby Financial Services’ Business Factors Index which highlighted that 29 per cent of business owners and managers are indeed hopeful for the future.

“And with almost a quarter (23 per cent) expecting to see signs of recovery within the next year, the Index also indicates there are signs of optimism against the current backdrop of the doom and gloom. The fall in inflation, and in particular energy prices, was reported to have had an effect on consumers’ confidence. But from our own study, we can see 60 per cent of UK firms have been managing debt more stringently to better prepare their businesses for further economic challenges.

“Businesses should look at the peak in confidence as an opportunity to invest in growth plans that will offer more competitive products and services to customers to get them spending. It is this, after all, that will help to speed up economic recovery.”