© DataTalk Research Ltd March 2014 Page 1

BCI – Financial Optimism Index; March 2014

Consumer Confidence continued to rise ahead of the Budget.

The British Consumer Index (BCI) has today (19 March 2014) released the latest Financial Optimism Index.

The Financial Optimism Index measures how people think their personal financial situation will change over the next few months.

The pre-Christmas stalling in confidence seems to have passed with consumers recovering their slightly optimistic outlook.

Budgets tend not to have any major immediate impact on sentiment with people tending to rely on their own experience to govern their views.

The chart (left) shows the trend in Financial Optimism for the population as a whole, however, within that there are wide discrepancies between different sections of the population. Detailed analysis of the data can establish levels of optimism different groups of people and how that is reflected in other behaviors and attitudes.

One example of this is the difference between those people who respond to on line surveys, those who don’t and those who have no internet access.

Post budget confidence surveys will tend to be conducted on line so it is interesting to see this variance in sentiment, see chart below.

© DataTalk Research Ltd March 2014 Page 2

It can be seen that the difference takes two forms; firstly those who respond to on line surveys tend to be more optimistic and, secondly they are more volatile in their views. People without internet access are both less optimistic and less volatile although this is more a function of the age profile than anything to do with internet access. The British Consumer Index started to collect data on whether people respond to on line surveys and, if so, what type in July 2011.

Implications for Spending

Financial Optimism is one of the major drivers of personal. The correlation between ‘Intention to Purchase’ and ‘Financial Optimism’ can be seen from the chart below.

The chart shows the number of people who do not intend to purchase in the near future from any of the 23 different sectors monitored by the British Consumer Index. This provides a useful measure of the ‘inclination to spend’ and, as such, can be interpreted as an indication of likely future spending. Again these figures represent the population as a whole; more detailed analysis will reveal trends for different sections of the population and the implications for different businesses.

For further information, analysis and comment contact:

Steve Abbott; Director; The British Consumer Index

Email; stevea@thebps.co.uk

Tel; 0203 286 1981

Skype; steveathebps

Notes: Figures are collected by The British Population Survey by face to face in home interviews with a population representative sample of 1,000 adults aged 15+ per month (total sample size = 51,919).

Financial Optimism Index values range between 100 (fully positive) and -100 (fully negative).