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Confident Consumers Raise Hopes Of Averting Double-Dip Recession

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Britain's consumer confidence rose in August for the first time in six months, bolstering the incipient economic recovery and raising hopes that the country will not fall into a double-dip recession, economists said.

The GfK NOP consumer confidence index increased by four points in August to -18, seven points higher than this time last year and the first overall increase since February. Based on 2,000 interviews with Britons over 16, the index showed consumers feel more positive about the economy and their personal financial situation over the past and next 12 months.

Howard Archer, chief UK and European economist at IHS Global Insight said: "This reduces the chances of a double-dip recession, but it doesn't mean that the economy is going to roar ahead."

The UK economy grew by a surprisingly robust 1.2% in the second quarter, an indication that recovery was under way after the worst recession in sixty years. "We are in recovery, and the improvement is good news, it alleviates some pessimism over prospects going forward," Archer said.

Confidence in the economy over the next 12 months was the index category that showed the biggest improvement, increasing to -14, from -25 in July.

"Overall consumer confidence has been in constant decline for the last five months and a further fall would have made a double-dip recession seem a very real prospect," said Nick Moon, managing director of GfK NOP Social Research. "The government will undoubtedly read these figures with a great deal of relief."

The coalition is facing criticism from economists who say draconian budget cuts will hinder economic growth. Despite the increase in confidence, the index showed most Britons were still pessimistic about the "climate for major purchases" – a category in which confidence worsened by four points to -20.

So it's now -14 instead of -25? Isn't a negative number still bad?

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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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      • Even
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