The Lloyds Bank Spending Power Report for January found that consumer confidence rose six points from the previous month, to reach a new survey high of 129 points.

The monthly report, which launched in November 2010, found that confidence about the UK’s economic situation has seen the greatest improvement, rising a further 12 points from December 2013 and a total of 91points compared to the beginning of January 2013.

Consumers’ sentiment towards their own personal finances improved with 57% of respondents saying it is excellent, very good or somewhat good compared to 54% last month.

Philip Robinson, director of personal current accounts at Lloyds, said: “With consumer sentiment continuing its upward trend, together with the highest positive levels seen to date towards personal finances, 2014 continues to show signs of a more stable year.”

Despite essential spending growth overall remaining little changed from last month, spending on gas and electricity bills grew rapidly at around 6% on a year ago compared to around 7% last month and remains a source of inflation concern for 77% of respondents. However, fuel spending continued to fall, with spending around 2% lower than last year.

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Last week, Bank of England figures showed the UK’s headline inflation rate fell to 1.9% in January, the first time it had fallen below the Bank’s 2% target in four years.