Many shoppers feel that now is a good time to make major purchases despite the skyward path of interest rates, new research shows.
A consumer confidence index by Martin Hamblin GfK edged up slightly from a reading of minus four in June to minus three in July.
The more positive reading comes despite successive attempts by the Bank of England to quell fevered spending on the high street which is threatening to push up inflation and overheat the economy.
Economists say the Bank’s Monetary Policy Committee is likely to raise interest rates again this month, probably by 0.25% to 4.75%, in an effort to cool retail spending and rampant economic growth.
However, with interest rates still at a traditional low and people’s willingness to take on debt as high as ever, dampening consumer sentiment is likely to be an uphill struggle for the Bank.
Grant Montague, director at GfK, said: “Consumer anxiety over recent interest rate rises seems to have lessened slightly with a higher perception that now is the right time to make major purchases than last month.”
According to a breakdown of the figures, perceptions of personal finances over the last 12 months fell one point to minus two, while expectations for the next 12 months stayed at plus nine.
However, the perception of the current climate for major purchases rose six points to plus 11, although this figure was still much lower than in July last year when it was plus 22.