Consumer confidence in Britain shot up in January to its highest level since November 2002 despite widespread expectations that interest rates will rise next week, a report showed on Thursday.
Research company Martin Hamblin GfK said its consumer confidence barometer rose to 0, close to its long-term average, from -5 in December.
This was well above levels seen during the Iraq war in early 2003, back to its long term average and also above analyst predictions of -3.
Consumers were more optimistic about both their own future financial situation and the outlook for the economy compared with last month. They were also much more disposed to make major purchases than they were a month ago.
"Ultimately, this paints a picture of a consumer that remains relatively upbeat," said John Butler, UK economist at HSBC Markets.
Analysts watch not only the change between the latest months but also how that compares with the difference a year earlier in the non-seasonally adjusted index. It usually jumps between December and January though this month's five-point rise was bigger than that seen a year earlier.
The Bank of England may take the latest figures as a sign that consumers have not been hit too hard by its November interest rate rise or the prospect of more to come.
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