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U.K. consumer confidence increased to the highest level since May after the Bank of England cut interest rates to a record low, GfK NOP said.

The market researcher’s index of consumer confidence rose five points to minus 30 in March, the company said in a statement in London. The survey of 2,003 people was conducted between March 6 and March 15.

The result “suggests that lower interest rates and a better picture for household bills are restoring some confidence,” Rachael Joy, an analyst at GfK, said in a statement. “However, it still remains historically very low.”

The U.K. economy contracted the most since 1980 in the fourth quarter and unemployment rose at the fastest pace in almost four decades in February. The central bank lowered the benchmark interest rate to 0 cash advance loans.5 percent this month and began printing money to buy assets after it predicted that the recession will push inflation well below the 2 percent target.

The GfK index measuring sentiment about the economic situation over the next 12 months rose seven points to minus 31. The climate for major purchases increased to minus 23 from minus 24, GfK said.

The report adds to signs that the economy’s deterioration is slowing. Mortgage approvals rose to the highest since May last month, the central bank said yesterday. House prices fell the least in 10 months during March, according to Hometrack Ltd.

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