Overall UK consumer confidence improved by 2% to -4% in the second quarter of 2018, according to the latest Deloitte Consumer Tracker.
This is the highest level since the tracker began in 2011 and follows a year of consistent growth from -10% in Q2 2017.
The new figure seems to have benefitted from the effects of a strong labour market, gradual wage growth, events such as the Royal Wedding and World Cup, and the feel-good factor associated with the start of the summer.
While an increase is being seen, there’s still a note of caution as confidence remains in negative territory and the high street continues to report contrasting fortunes with increases in business rates and employment costs.
Concerns about the long-term impact of Brexit on businesses also continue.
A combination of low inflation and wage growth has driven an increase in disposable income, resulting in an improvement in seven out of the eight discretionary spending categories measured, including restaurants and hotels, going out and holidays.
“Over the last year we have seen consumers exercising caution when spending, despite their confidence increasing during that period,” says Ben Perkins, head of consumer
business research at Deloitte. “The trend has been for consumers to favour spending on essential items over discretionary categories and cutting back on leisure spending. The fact that we are now seeing a narrowing of this gap is a sign of consumers delving into their pockets.”