British consumer sentiment hit a nine-year high in May, which is expected to add fuel to economic recovery in the near future.
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People shop at a supermarket in London February 16, 2013. REUTERS/Luke MacGregor
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GfK, a British polling company, Friday announced that its monthly consumer confidence index climbed to zero this month from negative three (-3) a month prior. This was the highest level of the gauge since April 2005, and exceeded market estimation consensus of negative two.
Nick Moon, managing director of social research at GfK, said in a statement: "The real driver of the increase is people's assessment of the general economic climate. There was a massive eight point jump in the retrospective assessment of the last 12 months and a four point increase in confidence about the next 12 months."
On the same day, however, the British Chamber of Commerce announced that it has upgraded its growth forecasts of the country for the next two years. The lobby body expects a growth rate of 3.1 percent this year, and a 2.7 percent next, higher than its previous estimation of 2.8 percent and 2.5 percent respectively.
While earlier this month, British central bank predicted that the country's economy would expand by 3.4 percent in 2014, the fastest pace since 2007.
The other three measures used to calculate the index, which are personal financial situation over last 12 month and next 12 month, as well as major purchase index, all increased by one point to negative 10, positive six and negative three in May respectively, data also showed.
Samuel Tombs, UK Economist of Capital Economics, commented in an analysis piece: "The further improvement in GfK's consumer confidence report in May suggests that the recovery in household spending could gather even more pace soon."
The London-based economic research company said it is sticking with its forecast that real household spending will grow by about 2.5 percent both this year and next./.