December 20, 2019 / 12:20 AM / a month ago

UK consumer and business morale touched five-month high before election: surveys

FILE PHOTO: Shoppers carry shopping in plastic bags in the West End, in London, Britain December 27, 2018. REUTERS/Henry Nicholls

LONDON, (Reuters) - Confidence among British consumers and businesses rose to the highest level in five months in the run-up to Prime Minister Boris Johnson’s emphatic election victory last week, surveys showed on Friday.

Consumer confidence rose to -11 in December from -14 in November, according to the long-running survey from market research firm GfK. A Reuters poll of economists had pointed to an unchanged reading on the month.

Similarly, a Lloyds Bank gauge of business confidence also rose to its highest level since July at 10%, up a point from last month.

Both surveys were conducted before the result of the Dec. 12 election in which Johnson secured a big majority in parliament, removing some uncertainty hanging over the British economy.

“Despite official warning signs about the flatlining of Britain’s economy, we know that record-high employment and below-target levels of inflation are helping to boost consumers’ expectations for the year ahead,” Joe Staton, client strategy director at GfK, said.

For businesses, growing optimism about trading prospects contributed to a rise in morale, Lloyds Bank said.

“There is now clarity over the UK’s departure from the EU, but the focus will turn to whether a new trade agreement can be negotiated during the transition period which currently runs until the end of next year,” said Hann-Ju Ho, a senior economist at Lloyds.

Official data covering economic Britain’s output for the third quarter, as well as new data on its balance of payments and the household savings ratio, are due at 0930 GMT.

Reporting by Andy Bruce, editing by David Milliken

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