Usually, consumer sentiment closely mirrors contemporaneous economic conditions, and it generally moves closely with the growth in household spending. Not surprisingly, the key influences on household spending, such as the growth of personal incomes and the buoyancy of financial markets, also appear to bear importantly on consumer sentiment.
Thus, the latest developments confirm that the stimulative impact of the low level of interest rates remains the dominant factor behind the current high trend rate of monetary expansion, which signals inflationary risks over the medium to longer term.