By Christina Fincher
LONDON, May 6 (Reuters) - British consumer morale enjoyed its biggest monthly boost last month in two years as people sensed the worst of the recession may have passed, a survey showed on Wednesday.
The Nationwide Building Society's consumer confidence index rose to 50 last month from 42 in March. The eight-point rise was the most marked improvement in the index since May 2007 while the level was the highest since December.
The figures tally with a survey by pollsters GfK last week which found consumer confidence recovered in April to its highest level in a year.
Consumer morale is often one of the first indicators of economic recovery and the survey results will provide some much-needed cheer to Prime Minister Gordon Brown as he struggles to boost his popularity before an election expected next Spring.
"In recent weeks, we have seen a strong rebound in global equity markets and some tentative signs of improvement in housing market indicators, both of which may have contributed to the marked upturn in consumer confidence during April," said Martin Gahbauer, Nationwide's senior economist.
However, with the economy likely to continue contracting for a while, he said it was too early to be sure the trend would continue.
Britain's economy shrank by 1.9 percent in the first three months of this year, its sharpest contraction since 1979. The government has forecast it will contract by 3.5 percent over the year as a whole and many economist are predicting an even steeper decline.
However, record low interest rates and a cut in sales tax do appear to be giving consumer some cheer, despite rising unemployment and sluggish wage growth.
Forward-looking indicators suggest the pace of contraction is slowing, a view reflected in financial markets where Britain's FTSE-100 index <.FTSE> has gained 26 percent over the last two months.
A breakdown by sector in the Nationwide index showed the biggest improvement in the expectations component, which rose 13 points to 70, its highest level since October. The present situation index rose one point to 21 and the spending index rose one point to 98.
(Editing by Ron Askew)