Opening Market Overview

UK Consumer Confidence at Over Nine-Year High in June

LONDON--British consumers were the most confident they've been in over nine years in June, a survey showed Friday, with expectations for the economy providing the biggest boost to their outlook.

The monthly GfK consumer confidence index rose to +1 in June, in line with expectations and up from 0 in May. It is the first time the index has been positive since March 2005, when it was also at +1. The last time the index was higher was in November 2002 when it reached +2, the data showed.

"An unspectacular change this month, but a psychologically important one, in that the index has moved into positive territory for the first time since March 2005," said Nick Moon, managing director of social research at GfK.

"The next few months will be particularly interesting, since the previous venture into positive territory was merely transitory--two isolated months in January and March 2005. The last time the index was consistently positive was back in 2002 and this must be the next target from the government's point of view as we get close to the election period," Mr. Moon said.
Details show that consumers were most optimistic about the economy in the next 12 months, while their 12-month outlook on their own financial situation was less positive in June than in May.

That is in line with the broad economic recovery, with output, demand and employment all recovering, but the slow level of earnings growth, which is close to, but still below the rate of inflation, likely keeping a lid on optimism over personal finances.

Indeed, the survey also shows that while appetite for major purchases, such as a new car or home, improved again in June, it still remains in negative territory at -2.

GBP Current Account -18.5B -17.1B -22.4B

GBP Final GDP q/q 0.8% 0.8% 0.8%

GBP Index of Services 3m/3m 0.9% 0.9% 0.9%

GBP Revised Business Investment q/q 5.0% 2.7% 2.7%

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