Nationwide’s monthly Spending Index rose sharply during December suggesting that consumers believe that now is a good time to buy household items such as white and brown goods.
A flurry of pre-Christmas sales seems to have improved confidence, but recognising that now is a good time to buy for example, TVs or fridges, may not always indicate a willingness to part with hard cash.
But despite the positive news, December’s report shows overall consumer confidence fell four percentage points.
Fionnuala Earley, Nationwide’s chief economist, said: ‘Consumers’ confidence fell sharply in 2008, driven mainly by their sentiment about the economic and labour market situation.
‘As the UK enters recession it is likely to be some time before we see confidence returning to levels seen in 2007.
‘However, we are starting to see signs that consumers are preparing for the challenges they may face in 2009 and this is likely to become more evident in the coming months as people take stock of how current and future economic conditions may impact on their personal circumstances.’
During December the spending index rose significantly despite the economic situation but Nationwide says this is likely to reflect heavy discounting on the high street.
The percentage of consumers who think now is a good time to buy household goods increased by 13 percentage points during the month from 28% to 41%.
Elsewhere in the survey, confidence to make major purchases such as houses or cars also rose slightly.
Expectations about house prices over the next six months showed a marked improvement in December with consumers now expecting prices to fall by 4.9% over the next six months, compared with 5.4% in November.