Consumers feel more confident about their disposable income than for two years, according to the latest Deloitte Consumer Tracker, and the increased optimism has fed into holiday bookings.
The tracker’s index rose by seven points in the second quarter of this year compared with the first three months.
At the same time it suggests consumer concern about debt has declined, down by almost half in the last year.
As a result, says Deloitte: “Consumers are showing a slightly greater willingness to spend on non-essentials.”
It reports: “Fewer consumers were spending less on holidays and short breaks in the last quarter. Net spending on holidays rose by two points to -4% in the second quarter.”
However, consumer sentiment remains negative at -29% – the difference between respondents feeling more or less confident about their income and spending.
The index remains below the level of October 2009 to October 2010 despite the improvement.
Deloitte head of travel, hospitality and leisure Graham Pickett said: “Sentiment is gradually beginning to improve though the consumer mood is cautious.”
Pickett noted “indications that UK holiday bookings are booming” and said: “The aviation sector is reporting an upturn in bookings.”
However, he added: “The hot weather is slowing activity on outbound holidays.”
The report notes: “Consumers are being less defensive and fewer say they intend to spend less on leisure in the next quarter.”
But it adds a note of caution: “Spending remains hesitant . . . Indeed, consumers have become used to weak income growth and their spending is unlikely to return to pre-crisis rates of growth for a long time.
The tracker found almost half as many survey respondents agree the UK economy is showing signs of recovery as disagree, and less than half as many believe their disposable income will be higher next year than this as don’t.
Deloitte surveys 3,000 UK adults each quarter to produce the index.