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Take consumer confidence. It is almost a decade since the closely watched GfK index was in positive territory. But ask people how they feel about their own lot, rather than the economy more broadly, and the picture is much better.\u00a0Expectations for personal finances over the next 12 months have been trending higher since the end of Liz Truss\u2019s shortlived premiership in October 2022, and are above their 10-year average.<\/p>\n
Households are also\u00a0more willing than they were to make big purchases. Young people are particularly optimistic,<\/a> the index shows. This shouldn\u2019t be surprising. Inflation hit hard in 2022, but wages have now been rising faster than prices for more than two years.<\/p>\n The UK\u2019s animal spirits may not be driven by record highs in the stock market, unlike the US where share ownership is more widespread. But the housing market is helping.\u00a0Interest rates are falling, while various indices show prices rising.<\/a><\/p>\n This is filtering down to companies, with signs of higher demand for large discretionary purchases such as cars, kitchens and sofas. New car registrations jumped almost 14 per cent year on year in September, according to the Society of Motor Manufacturers and Traders. Yorkshire-based settee specialist DFS just reported its first year of revenue growth since 2022, with like-for-like orders up 10 per cent.<\/p>\n True, it\u2019s easy to find places where things look decisively rosier. In the US, economic cheerleaders abound. But growth there has been propped up by massive artificial intelligence-related investments; economists at Pantheon Macroeconomics argue recent UK GDP growth, meanwhile, has been \u201cwell balanced\u201d between investment, household and public spending.\u00a0\u00a0<\/p>\n And compared with some of its neighbours, the UK still stands favourably. Thierry Garnier, chief executive of B&Q owner Kingfisher, last month contrasted \u201cresilient\u201d British consumers<\/a> with pessimism in France, where political uncertainty<\/a> has had a greater impact.<\/p>\n As always, there\u00a0is something of the Rorschach test about economic signals. NatWest\u2019s Thwaite noted that one can \u201cfind what you want to find in the data\u201d. Even as the Lloyds Bank business barometer shows elevated confidence, an Institute of Directors report claims managers have never been more worried<\/a>. Inflation is too high, unemployment ticking higher, and the government may try to plug its budget hole with policies that hurt growth.\u00a0<\/p>\n Still, investors could learn something from the US. Predictions of a recession from luminaries like JPMorgan chief Jamie Dimon failed to come true, for reasons economists still struggle to explain. But \u201cnever bet against consumers\u201d has become a common refrain. <\/p>\n Optimism may not come quite so easily to Brits \u2014 especially with chancellor Rachel Reeves\u2019 Budget still six weeks away \u2014 but there are positive signs for those inclined to seek them. The national sport of Britain-bashing may have gone too far.<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/d38ba0d0-a380-11f0-a86d-95338406c194-standard.png\")
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