Consumer confidence has risen to its highest level in more than three years, according to a report from Lloyds Bank.
The Lloyds Bank Spending Power report said consumer confidence rose six points in January to reach a new survey high at 129 points, reports The Telegraph.
The monthly report, which has been running since 2010, said confidence on the economy saw the greatest improvement, up 12 points in January.
The majority of people now expect to be better off in six months’ time and consumers are positive about their personal finances, with 57pc saying their situation is excellent or good.
However, the survey of 2,000 respondents found that people were more inclined to save than spend any extra cash. The balance of people planning to save more in the coming months rather than less rose to 14pc in January.
Philip Robinson, director of personal current accounts at Lloyds, said: “With consumer sentiment continuing its upward trend, together with the highest positive levels seen to date towards personal finances, 2014 continues to show signs of a more stable year.”
Spending on gas and electricity is still growing rapidly at about 6pc compared to a year ago, the report said, and rising bills are a concern for 77pc of consumers.
Figures released last week showed that inflation fell below the Bank of England’s 2pc target for the first time in more than four years in January, easing pressure on households.
The Consumer Prices Index (CPI) dipped to 1.9pc in January from 2pc in December and experts have predicted that inflation will remain under the 2pc target throughout 2014, fuelling hopes that wage growth will finally overtake rises in the cost of living.
Meanwhile, Lloyds’ report showed that consumer confidence in the housing market continued to grow, rising by 3pc in January to 44pc. This follows the launch of the Government’s flagship Help to Buy scheme last year, which gives people with a deposit as low as 5pc a helping hand on or up the property ladder.