Consumer Optimism 'rises'

Britain's financial confidence is showing further signs of improvement, new figures indicate.

In the latest Consumer Confidence Index by Nationwide, the nation's monetary optimism rose by some five points over the course of September. The news comes despite the turmoil seen in the finanical industry in recent months which has seen a number of credit providers become stricter with their lending criteria towards those looking to apply for loans.

With the present situation index rising by six points to 102, it was suggested that the nation is feeling "upbeat" about the current monetary climate. Findings from the finanical services firm showed that positivity among the public in regards to their feelings about the existing economic and employment situation has risen over the last few weeks. This was further highlighted in the expectations index, focusing on prospects for employment and economics, which was up by four from August to 96.

Overall, some 60 per cent of Britons are positive about the proportion of jobs which are currently available - a rise from the 51 per cent noted in August. Meanwhile, the proportion who view the existing employment situation as being unfavourable has fallen to 19 per cent - the lowest level recorded since May 2005. The study also showed that the public expects house price growth to slow down over the coming months. At the moment, consumers believe property values will rise by 3.2 per cent during the next six-month period, in comparison to an increase of 3.8 per cent recorded during August.

Meanwhile, the spending index, which judges the public's readiness to buy products, surged over the course of last month. During September the index rose to 85, after undergoing a fall of seven points over the course of August. And although this present figure is some 15 points below that which was recorded in the same time last year, it is above the present three-month average of 83. However, with the research not covering the Northern Rock crisis, it was suggested that general consumer confidence could be set to fall over the coming weeks.

Commenting on the figures, Fionnuala Earley, Nationwide chief economist, said: "The pick-up in confidence has been largely driven by confidence in the labour market. When people feel secure in their employment it is perhaps not surprising that their general confidence levels are more robust".

"The effect of the recent financial turmoil on overall economic - and hence labour market - conditions is therefore crucial to consumers' confidence going forward. Early indications suggest that consumers may have been more affected by the initial run on Northern Rock, but any lasting effects will be dominated by the impact of recent events on the real economy."

With the country's financial confidence currently in a state of positivity, now may be an ideal time to consider taking out a personal loan to help make a major purchase such as a car, carry out home improvements or simply to aid in managing money more effectively. Before doing so, however, prospective borrowers may wish to get a copy of their credit file. Earlier this year, a study carried out by Garlik showed that a third of consumers are unaware that such a file is used by loan lenders when they decide whether to approve an application for a loan and what level of interest will be set. The research also showed that a fifth of Britons are unaware that such a document is even held in their name.