The building society’s February report indicates that consumers’ plans for the next six months are moving towards spending rather than saving, with the number of people looking to reduce their debts falling by five percentage points to 48 per cent.

Those intending to save more in the future are also an ever-dwindling group, falling by three percentage points to 21 per cent, Nationwide suggests.

Several consumer confidence indicators have reached their highest levels since Nationwide began measuring it in June 2004.

Expectations of an increase in future household income have risen consistently from 14 per cent in June last year to 26 per cent in February, and confidence about making major purchases (such as house or a car) saw its net balance rise four percentage points.

“Consumer sentiment appears to be shifting from saving to spending and we would expect to see this reflected in retail sales figures over the next six months. UK consumers appear to be more confident about the future with key measures of household income, jobs and the economy all hitting highs,” said Stuart Bernau, executive director of Nationwide.

The renewed consumer confidence is understandable. The UK economy grew by a steady 2.8 per cent in 2004 and enjoyed its 50th consecutive quarter of growth.

In addition, the FTSE 100 share index exceeded 5,000 points in February for the first time since May 2002.

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