The index is now nine points higher than three months ago as the pace of improvement in consumer confidence continues to accelerate.
Confidence about the UK's economic situation has continued to improve in September, with increasing optimism about the housing market and further easing of concerns about the employment situation.
While sentiment about consumers' own personal finances is little changed this month, the balance of opinion about future discretionary income became positive for the first time in the survey's history.
A softer improvement in confidence about the future situation appears consistent with areas of pressure on consumer budgets against a backdrop of static wage growth.
Although gas and electricity spending growth has eased a little in September to around 8% on a year ago, gas and electricity prices remain a source of concern for overall price inflation for 77% of respondents. This likely reflects expectations of future increases in light of recent announcements.
Overall, growth in average spending on essential categories eased to around 3% on a year ago, with spending growth on fuel notably falling back. However, this remains well below the pace of wage growth in the most recent official data, which grew at an annual rate of 0.7% in the three months to August.
Patrick Foley, chief economist at Lloyds Bank, said: "Consumer sentiment continues to firm. Continued positive developments in the economic backdrop, and relative stability in essential spending growth, suggests consumers should in time become more willing to spend. This would, in turn, permit the economic recovery to gain further traction.”
Current situation
The number of consumers with a positive view of the housing market in September continues the recent upward trend reaching a new peak of 41%, compared to 39% in August and 34% in July. Regionally, those living in Northern Ireland continue to have the most negative view towards the housing market, with 72% stating it is ‘not good' or ‘not good at all', against a UK average of 59%.
While still high, negative feelings towards the employment market continue their slight downward trend, with 78% of respondents saying that it is ‘not good' or ‘not good at all'. This compares to 81% last month, and 82% in July. 56-64 year olds hold the most pessimistic view with 87% saying it is ‘not good' or ‘not good at all'.
However, fears around increases in prices of utilities and petrol have risen slightly. Those indicating gas and electricity prices as a reason for inflation concerns increased slightly to 77%, while those indicating food prices, while still high, were broadly stable at 75%.
Consumer sentiment towards their own personal finances continues to remain a concern with 46% of respondents still saying they are ‘not good' or ‘not good at all'. 45-54 year olds once again have the most negative view of their personal finances, with 56% continuing to say they are ‘not good' or ‘not good at all'. Those living in London have the most positive view, with 18% saying that it is ‘very good' or ‘excellent', compared to 6% in Northern Ireland.
Future situation
For the first time since the survey began, we see a positive balance for discretionary income sentiment, with a net balance of 1% between those who feel they will have more money in the future versus less money to spend after household bills and essentials have been paid. Greater London has the highest positive balance at 15%.
Those that feel they are able to save in the future also increases slightly in September to its highest level since the creation of the report, with a net 7% balance between those who feel they will be able to save more money in the future versus much less. The most optimistic about the future levels of saving continues to be those between 18-34 year olds with a positive balance of 40%, while the most pessimistic are 55-63 year olds, with a negative balance of -14%.
Additionally, those that feel they are able to pay off their debt in the future increases slightly this month, with the balance of opinion between those who feel they will be able to pay off much more of their debt versus much less standing at 7%.
