Continued falls in essential spending, particularly on gas, electricity and automobiles, has been boon to consumers, according to Lloyds.

Consumers are more positive about the country’s finances – although net sentiment is still negative – while feelings towards the housing market and the current employment situation have also improved. Greater London is the most positive region when it comes to the UK’s financial outlook and employment situation, while the East Midlands is most encouraged by the housing market.

Patrick Foley, chief economist at Lloyds, said: “An ongoing UK economic recovery remains most visible in the positive employment outlook, which continues to provide the most tangible support to consumer sentiment. But against a backdrop of still-subdued wage growth, reduced pressure on household budgets from spending on essentials helps provide the room to undertake discretionary spending, further supporting the recovery.”

When it comes to personal finances, consumer sentiment has improved six points for August to 18 per cent. Greater London is once again the most positive region at 31 per cent, followed by Yorkshire and Humberside. Northern Ireland is the least positive region at four per cent.

Philip Robinson, director of Personal Current Accounts at Lloyds Bank, added: “People are feeling more confident than ever about the state of the nation’s finances as well as their individual financial situation. Confidence in the UK’s economy has improved, helping people to make their own plans with conviction. As the future situation looks even rosier, now is a good time to start saving for Christmas and spread the cost over the next three months.”