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UK consumer confidence hits 12-year high in March - GfK

LONDON (Reuters) - British consumer morale rose to its highest level in more than 12 years this month, continuing an upward trend which economic polling company GfK said could boost Prime Minister David Cameron's hopes of re-election in May 7's election.

GfK said its monthly consumer confidence index rose to +4 in March from +1 in February, its highest since June 2002. This exceeded all forecasts from 17 economists polled by Reuters last week, after households reported a greater willingness to spend and a more upbeat view of the economy.

Polling was mostly conducted before Chancellor George Osborne's final pre-election budget, and GfK said the initial public reaction to the modest changes in it had been "muted".

"If people warm to it over the next few weeks then we may well see a further increase in the index next month," said Nick Moon, GfK's managing director of social research.

"A consistently rising index in the run-up to the election is likely to be good news for the government," he added.

Despite strong growth over the past 18 months, Cameron's Conservative Party has not built a lead over the opposition Labour Party led by Ed Miliband.

Wages have started to rise faster than inflation in recent months, but Labour says most households are still significantly poorer than at the time of the last election, due to high inflation and weak pay growth in previous years.

A separate survey from polling company YouGov and economics consultancy Cebr on Tuesday showed Britons who think their financial situation will improve in 12 months' time outnumbered those who say it will deteriorate for the first time since records started six years ago.

(Reporting by David Milliken, editing by Andy Bruce)