BusinessPostCorner.com
No Result
View All Result
Sunday, June 1, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

Jump in UK consumer confidence dampens rate cut expectations

November 24, 2023
in Finance
Reading Time: 4 mins read
A A
0
Jump in UK consumer confidence dampens rate cut expectations
ShareShareShareShareShare

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK consumer confidence rose sharply in November, according to a closely watched survey on Friday that damped expectations of interest rates cuts and pushed the pound to a 12-week high.

The GfK consumer confidence index rose six points to minus 24, outperforming expectations and raising hopes of higher spending on Black Friday and the festive season.

The index — a measure of how people view their personal finances and broader economic prospects — was a further sign of British economic resilience after better than expected data on private sector activity a day before.

The data bolstered markets bets that the Bank of England will hold its benchmark rate at its current high of 5.25 per cent for longer than previously thought. Consumer confidence is closely watched because it provides a near real-time indicator of shoppers’ mood and spending behaviour.

“Markets had pulled forward interest rate cuts to levels that, I think, were quite simply unrealistic,” said Peter Schaffrik, chief European macro strategist at RBC Capital Markets. “Now we have data that slightly contradicts that, so the markets are taking some of it back.”

Investors now expect the BoE to deliver its first rate cut by September next year. At the beginning of the week, they were betting it would come by June.

The pound rose 0.6 per cent against the dollar to trade at $1.26, the strongest level since September 4.

Benchmark 10-year gilt yields, which move inversely to prices, rose 0.05 percentage points to 4.31 per cent on Friday, having climbed 0.1 percentage points in the previous day’s trading session.

Schaffrik said another factor driving the sell-off in gilts was a warning by Huw Pill, the BoE’s economist, in an interview published by the Financial Times on Friday that price pressures remained “stubbornly high”.

“The previous communication that he, specifically, has delivered has been a bit more supportive of rate cuts,” Schaffrik added. “He’s now toeing the party line.”

A fall in household spending contributed to the stagnation of the UK economy in the three months to September, but the improvement in consumer confidence in November suggests spending could rise in the busiest shopping season of the year.

The metric has been volatile in recent months, boosted by falling inflation and strong wage growth but dragged down by high borrowing costs and rising fuel prices.

Joe Staton, client strategy director at GfK, said the improvement in consumer confidence “will be good news for retailers looking to benefit from Black Friday and Christmas”.

Purchasing managers surveys, a measure of private sector activity, were also better than expected for November, with growth returning after three months of contraction. The data, released on Thursday, also indicated persistent price pressures.

Recommended

Illustration of Jeremy Hunt using a leaf blower to blow a flurry of £5 notes around

Tomasz Wieladek, chief European economist at T Rowe Price, said the improved business and consumer sentiment suggested it was “plausible the Bank of England was too pessimistic” in forecasting a prolonged period of UK economic stagnation.

“Therefore, there is a risk markets have too many cuts priced in, especially when wage inflation remains at these elevated levels,” he added.

Richard McGuire, head of rates strategy at Rabobank, said: “The market has been on a knife-edge for some time: it doesn’t take much in terms of a firmer datapoint or flow to see the market undertake a violent swing.”

Credit: Source link

ShareTweetSendPinShare
Previous Post

Accounting in 2024: Artificial intelligence, tech innovation and more

Next Post

Elon Musk calls Swedish unions ‘insane’ for hurting Tesla

Next Post
Elon Musk calls Swedish unions ‘insane’ for hurting Tesla

Elon Musk calls Swedish unions ‘insane’ for hurting Tesla

Tax Fraud Blotter: Side hustles

Tax Fraud Blotter: Side hustles

May 29, 2025
Free yoga sessions for people in north Devon

Free yoga sessions for people in north Devon

May 29, 2025
US Steel workers see hope of job security in deal with Japan’s Nippon

US Steel workers see hope of job security in deal with Japan’s Nippon

June 1, 2025
US-China trade talks ‘stalled’, says Scott Bessent

US-China trade talks ‘stalled’, says Scott Bessent

May 30, 2025
Trump extends deadline for 50% tariffs on EU to July 9

Trump extends deadline for 50% tariffs on EU to July 9

May 25, 2025
‘Crypto king of Kentucky’ arrested for allegedly torturing man with saw and electricity in bid to steal his Bitcoin

‘Crypto king of Kentucky’ arrested for allegedly torturing man with saw and electricity in bid to steal his Bitcoin

May 27, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Bitcoin Price Prediction: 4K – BTC Price Correction or Breakout Reloading?

Bitcoin Price Prediction: $104K – BTC Price Correction or Breakout Reloading?

June 1, 2025
Fixed-wing flying car nears production, bringing ‘Jetsons’ future a step closer

Fixed-wing flying car nears production, bringing ‘Jetsons’ future a step closer

June 1, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!