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Housing market boosts confidence
Consumer confidence in the economy has improved to its strongest levels in at least two-and-a-half years as optimism about the housing market and jobs rises, a report has found.
Sentiment towards the housing market is at its strongest since Lloyds Bank's Spending Power report began in November 2010, while worries about employment were also found to have eased.
Almost one fifth (18%) of people felt positive about the economy in August, showing a sharp increase from just over one in 10 (11%) in January. The proportion of people feeling negative about the economy fell to 31%, showing the lowest levels since research began.
These findings helped Lloyds' overall consumer sentiment index to rise to an all-time high of 115 points in August, marking a 10 point increase since the start of the year.
Patrick Foley, chief economist at Lloyds Bank, said the findings were "very encouraging". He continued: "Increasing consumer sentiment may in time embolden consumers to spend, so helping to underpin the wider economic recovery. In turn, such spending would further help improve the outlook for growth and jobs."
A new high of 39% of consumers were feeling positive about the housing market, which has recently seen a surge in activity following Government schemes such as Funding for Lending which have improved mortgage availability and led to some lenders offering their lowest ever rates.
House prices have also been back on an upward march in recent months, helping some home owners who have seen falls in the value of their property in recent years and who may have previously been stuck in negative equity.
People living in Northern Ireland, which has seen some particularly sharp drops in house prices before more recent signs that prices are stabilising, were the most likely to be downbeat about the housing market. Nearly three quarters (74%) of those surveyed in Northern Ireland said the housing market is "not good" or "not good at all", as did 72% of those in the North of England.
Meanwhile, negative feelings towards the employment market continued on a downward trend. Some 81% of consumers said the jobs market is "not good" or "not good at all", marking a decrease from 82% in July and 87% in May. Young people were the most likely to be upbeat about the employment market. More than one fifth (22%) described it as "somewhat good", compared with 16% of consumers generally.
People are also feeling less negative about how much money they will have in the coming months. The overall balance between those who feel they will have more money in the future minus those who predict they will have less was minus 3% in August, improving from minus 5% in July.