Consumer confidence high as interest rates predicted to stay low

CONSUMER confidence is on the up thanks to expectations that interest rates will remain low for at least six months, according to a survey.

The Bank of England’s base rate of interest has been at just 0.5% for the past two-and-a-half years.

The proportion of homeowners fearing an increase in their mortgage rate has decreased from 49% to 22%, which has helped boost confidence, up by 0.8% from a low of 6.3% in January.

Liberum Capital, which carried out the survey, said that it was the third increase in confidence it had registered since the start of the year.

The slightly rosier outlook has allowed consumers to continue going to the pub, eating out and betting, it said.

Simon Irwin, Liberum Capital retail research analyst, said: “With all the gloom and misery of the debt crisis, it’s great to see that British people have not given up on enjoying themselves and are still enjoying the small niceties of life such as their local.”

The research also found that most Britons do not want the country to stump up money for a hypothetical eurozone bailout.

Just 11% said they would support UK participation in a rescue fund for the troubled monetary union, with 62% saying they would not support such an action.

Bank of England Monetary Policy Committee member, David Miles, recently said that it is unlikely the base rate of interest will change in the next few months. He added that in the past two months, news on the economic outlook has been “overwhelmingly negative”.