Consumer confidence is at its highest for 18 months according to the latest survey from the British Retail Consortium and market researcher Nielsen. The Confidence Index increased for the fourth consecutive quarter. It was three points higher than when the survey was last polled in December 2009 and is 15 points higher than this time last year, when it hit its lowest point during the recession.

But some big worries are still affecting customers. Concern about jobs is not easing. Nearly three quarters of people (71 per cent) said they thought job prospects over the next year were “bad” or “not so good”, which is virtually unchanged since December last year.

Justin Sargent, group md at Nielsen UK & Ireland said: “Increasing costs are coming to the fore once again with consumers feeling the recent fuel price increases. We have seen food inflation increase in the last couple of months also so we may find a situation going forward where people start pulling back on discretionary spending more as paying for the basics puts pressure on household budgets.

“For now, things are looking slightly better than they did last quarter but confidence is not coming back in leaps and bounds.”

A spokesman for the British Retail Consortium told freshinfo: “Food retailing is more resilient in the downturn, but there is more interest in the value lines and consumer need a lot of convincing that they are getting some other benefit if they are buying anything other than the cheapest available option. They have not abandoned premium lines altogether, but they have got to be really clear they are getting something extra for any extra they are paying.”

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