However, Nationwide said levels remain significantly below the long-term average and it is uncertain whether such optimism will be sustained in the face of public spending cuts and tough housing and jobs markets.

Mark Saddleton, head of economic and market analysis for Nationwide, said the rise in consumer optimism in August had helped to recover some of the ground lost since its peak in February.

Saddleton said: “It may be that the recent dip was a product of increased caution following the General Election as consumers assessed what direct impact a change in government and new austerity measures would have on their individual circumstances.

“The main driver behind the increase in August has been an uplift in confidence towards the future situation, in particular consumer expectations of future economic circumstances.”

He said: “While the indicators suggest the outlook may be starting to look a little brighter, faith in the present situation remains at a low level and growth in this area will play an important role in the strength of any recovery in confidence in the coming months.”

Sponsored

Shawbrook is the specialist mortgage sector’s ‘best kept secret’ – Sard

Sponsored by Shawbrook Bank

Consumer confidence in the current economic situation has continued to grow at a slow rate, while spending confidence increased in August reversing the fall seen in July.

However, consumers are pessimistic about house price growth, expecting prices will fall by 0.1% over the next six months, compared to an expectation of a 0.4% growth in July.

Saddleton said: “Overall, August proved to be a positive month for consumer confidence following an otherwise turbulent year for the index.

“While there is still a long way to go before it can be said that confidence has returned, these figures are an encouraging sign that consumers may be starting to feel more upbeat.”

However, he added: “Downward pressure is likely to be placed on confidence in the shape of speculation over public spending cuts, a stuttering housing market and a difficult job market, but positive retail sales on the high street and a continued low base rate may help to stem any further falls.

“September’s results should help to paint a clearer picture as we move into the final quarter of 2010.”