Lower petrol prices keep drivers ticking over

FALLING petrol prices have sent consumer confidence bouncing back, according to a key report.

Consumers are pumped up by drop in petrol pricesGETTY

Consumers are pumped up by drop in petrol prices

The Spending Power Report by Lloyds Bank said consumer confidence in October was at the second highest level since it launched the survey in 2011.

Pressure on household budgets was lifted by a drop in petrol prices, 6 per cent lower than a year earlier, while domestic budgets were also helped by mild autumn weather which helped keep gas and electricity bills 5.5 per cent lower.

Consumers remain in a positive mood with the pressure on budgets from essential spending lifting a little

Patrick Foley, chief economist at Lloyds Bank

It also showed sentiment towards the UK's economic situation had improved, helped by job creation and emerging signs that wage growth is picking up.

Patrick Foley, chief economist at Lloyds Bank, said: "Consumers remain in a positive mood with the pressure on budgets from essential spending lifting a little. Though risks around the economic outlook have risen somewhat, emerging signs of a modest strengthening in real wage growth should help support the UK recovery."

Based on data from Lloyds, Halifax and Bank of Scotland customers and interviews with 2,323 people, the report's consumer confidence index rose by five points to 151.

Greg Coughlan, director of personal current accounts at Lloyds Bank, said: "The continued improvement in individuals' situations shows consumers are having more confidence in their own finances."

THE CBI said the UK recovery was solid but warned it must be alert to knock–on effects from the weak eurozone economy, tension in the Ukraine and slowing emerging markets. In its submission to the Chancellor ahead of next month's autumn statement it called on him to focus on infrastructure investment, reforming business rates and expanding tax credits for research and development.

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