This is according to the latest Lloyds Bank Spending Power Report which shows improvements in sentiment in all components of the index: people’s current personal financial situation; the view on the country's financial situation; the outlook for the UK’s employment market; and the proportion with some disposable income.
In addition, Lloyds Banking Group economic data shows that March once again saw a fall in essential spending of -0.5% overall, although this fall in spending is slowing down from previous months (Feb -1.0%, Jan -0.6%).
This slowing down is largely caused by growth in food spend, which constitutes over 40% of essential spending and was up by 1.7% in March compared to this time last year. This comes after three consecutive months of no growth and is predominantly due to Easter spending occurring in March this year, in comparison to 2014 when this spending occurred in April.
March’s consumer research showed that after two consecutive months of increased positive sentiment towards inflation with lower spending on food and fuel, there has been a small swing away from those feeling excellent or very good about it.
Claire Garrod, head of personal current accounts at Lloyds Bank, said: “Spending power is continuing to grow and is being driven by more confidence about people’s current individual and household financial situations. However, with Easter spending occurring in March this year, we have seen increased spend on food and fuel last month, although levels of spending are still lower than at the same time last year.”
The Future Situation Index remains stable and the perception of people surveyed towards their future discretionary income also remains stable. Of those who believe they will have more money in six months’ time, over a third (34%) expect to pay off more debt, and seven in ten (70%) of the population plan to save more, compared to 69% in February.
Patrick Foley, chief economist at Lloyds Bank, said: “As a stronger economic backdrop continues to develop, consumers are becoming more confident in both their own financial situation, and the country’s.
“And while political uncertainty looks likely to rise following the General Election, household sentiment should be supported by the modest pickup in wage growth that seems to be unfolding. This suggests the UK’s economic prospects remain bright.”
