Consumer confidence in Britain reached its strongest level in 17 months despite elevated inflation and soaring interest rates.

The market research firm GfK said its measure of sentiment rose three points to minus 24 in June. Economists had expected a reading of minus 26.

The figures indicate households are so far weathering the cost-of-living crisis. 

They mark a sharp contrast with investor bets that the Bank of England will drive borrowing costs to as high as 6pc through the summer in an effort to tame stubbornly high inflation.

The Bank of England stepped up its fight against inflation on Thursday by increasing interest rates by half a point to 5pc, the highest since 2008.

Joe Staton, director of client strategy for GfK, said: “Consumers are showing remarkable resilience in the face of inflation that is currently refusing to yield.”

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