Nationwide Building Society’s Spending Index experienced a ten-point rise to 90 in December 2010, with people seemingly more inclined to make major purchases during the month.
The percentage of people believing that December was a good time to make a major purchase increased by three points during the month to reach 25 per cent, while the proportion of consumers thinking it was an ideal moment to buy household goods grew by 12 percentage points to 43 per cent.
Findings from Nationwide reflect what a number of retailers said in the final quarter of 2010; that the VAT rise on January 4th would prompt people to bring forward their spending.
A study from the Centre for Retail Research, published last year, predicted the VAT increase to 20 per cent will cost retail some £2 billion in sales during the first quarter of 2011.
Meanwhile overall consumer confidence (CC) increased after three consecutive months of loss and following November’s near historical low level.
Nationwide’s index has also revealed that pessimism continues to surround the housing market, although the degree to which people believe house prices will fall has decreased from 1.4 per cent to 0.9 per cent.
Robert Gardener, Nationwide’s Chief Economist, said: “The December survey suggests that consumers were feeling a little more upbeat as we approached the new year.
“While the up-tick is encouraging, household confidence nevertheless remains subdued, reflecting ongoing uncertainty about the economic outlook.”