-Nick Moon, managing director of social research at GfK
British consumer confidence rose more than expected in January to reach the highest level in five months, providing a support to Prime Minister David Cameron ahead of the general election in May. According to GfK, a consumer sentiment index jumped 5 points to +1 in January, recording the biggest monthly increase in a year and hitting the level last seen in August, which was the highest since 2005. Consumers helped pushed the UK to the strongest growth since 2007 last year as exports struggled due to economic and political problems in the neighbouring Euro zone. It is expected that an oil-triggered decline in inflation, increasing wages and the prospect of interest rates staying at historic lows this year could see the economy grow at a similar pace this year.
A separate report showed the number of mortgage approvals rose in December despite signs of moderation in the housing market. Mortgage approvals increased to 60,275 in December, according to the Bank of England's report. Additionally, the volume of credit for house purchases also rose by 1.6 million pounds. The number of approvals dropped in most months last year, cooling house price growth and alleviating concerns about a bubble in the housing market. Mortgage lender Nationwide said that British house prices rose at their slowest pace in 14 months in January, soaring by less than 7% on an annual basis.
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