In the face of job and tax worries and a softening housing market, 'cautious yet upbeat’ best captures the feedback in Liberum's latest UK consumer sentiment survey carried out through Oct/Nov.
Click on the image below to see a four-minute video from this year's City AM Analyst of the Year, Ian Whittaker, that puts the survey in context.
Striking is the rising appetite for home improvements, house moves, flexible hours and overtime, with bonus expectations rebounding.
Polled before the sharpest falls in the price of oil, the British consumer also expects inflation to ease further and even appears less hostile to utilities.
The sense of job security has slipped but expectations of more flexible hours, overtime and bonus payments have improved markedly. This underpins the improved mood toward disposable income and spending power. The continued fall in the costs of essentials and fuel prices has helped.
The British consumer expected an interest rate rise within around eight months back in the summer. That’s now pushed out to more than nine months. More than a quarter of those polled expect it over a year hence, up from a fifth in the past two quarterly surveys.
It will come as no surprise to find that the most popular answer to the question on whom you would vote for as Prime Minister was "none of these". However as we approach the general elections we see this percentage decreasing.
Whilst David Cameron’s support increased, Boris Johnson's support inched back. Nigel Farage’s polls have increased in this quarter shortly followed by Ed Miliband. Similar to previous quarters’ trends Ed Miliband keeps double the vote of his brother, David.
The remaining votes were equally split in between Alex Salmond, Ed Balls, who both have gained share since the previous quarter and Nick Clegg.
The survey has been running since September 2009 and our index is derived through weightings applied to the net positive scores of the factors. Job security (20%), Mortgage Payment Outlook (15%), Tax Outlook (12%) and Housing (20%) are key factors which we place a greater weight on. The index has been on an upwards trajectory since October 2012, peaked in Q2 14 at 13.3% and eased since then to 9.9 %.
Methodology 1,005 respondents were asked their views in October/November 2014. The respondents were evenly distributed by gender (males: 49%, females: 51%), across age groups and throughout the social classes (A-B: 27%, C1-C2: 47% and D-E: 27%).
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