Consumer confidence rose 11 points in May, according to the Nationwide Consumer Confidence Index, but remains low.

Consumer confidence rose 11 points in May, according to the Nationwide Consumer Confidence Index, but remains low.

Confidence among the 1,000 consumers surveyed reached 55 points last month, nine points below the same period last year.

The building society attributes the increase to the warm weather, the numerous bank holidays and the Royal wedding, all of which boosted sentiment in the UK.

Nationwide’s chief economist Robert Gardner warns that the index remains ‘well below the historical average’.

‘This month’s rise was largely driven by significant increases in the Expectations Index, which rose by 17 points to 76, and the Spending Index, which registered a 16 point rise to 79,’ he explains.

The Expectations Index is a measure of consumers’ sentiments toward the economy, labour market and household income over the next six months, while the Spending Index reflects consumers’ feelings about spending on household goods and major purchases.

There was a ‘more modest’ three point increase in the Present Situation Index, which reflects sentiment about the current economic and employment situation, to 23, the same level as May 2010.

‘It is too early to say whether consumer confidence is in a sustained recovery. There are still strong downward pressures, not least higher than hoped for inflation and continued concern around employment, whilst recent announcements of large domestic energy price hikes are likely to dampen consumer mood,’ Gardner adds.

He believes that a further rise in confidence would come about as a result of a ‘real improvement’ in wages and employment, or a fall in inflation.

The study was conducted by market research company TNS-RI, and took place from 25 April to 22 May this year.