U.K. Consumer Confidence Rises for First Time in Four Months
U.K. consumer confidence rose for the first time in four months in September as Britons became more optimistic about the economic outlook and spending, GfK NOP Ltd. said.
An index of sentiment gained 1 point from August to minus 30, the London-based research group said in an e-mailed report today. A measure of households’ expectations for the economy over the coming 12 months climbed 4 points to minus 27 and a gauge of households’ assessment of whether this is a time to make major purchases climbed three points to minus 28.
“Despite growing fears about the global economy, British consumers are feeling a little more hopeful about the state of the home economy,” GfK Social Research Managing Director Nick Moon said. “With economic growth effectively stalled at the moment, retailers would welcome more high street activity.”
GfK said that while the increase is not statistically significant, it is “psychologically important” as it halts a recent decline in sentiment. Still, Bank of England policy makers have indicated they are becoming more concerned that the recovery will cool further and most of them said this month that they see expanding stimulus as “increasingly probable.”
The increase in September still leaves the confidence 10 points lower than September last year. The minus 30 reading is also below the minus 25 average of the last three years. A European Commission report yesterday showed U.K. household sentiment declined in September. It’s gauge fell to minus 21.7, the lowest since April, from minus 19.8.
The pound fell 0.6 percent against the dollar today and traded at $1.5542 as of 8:17 a.m. in London. It’s still headed for its first weekly gain in six weeks against the U.S. currency.
Britons’ confidence has been undermined this year by inflation that is almost double wage growth and the largest government budget squeeze since World War II. A retail-sales index fell to its lowest level in 16 months in September as consumers cut back spending on clothes and groceries, the Confederation of British Industry said on Sept. 27.
The Bank of England held its bond-purchase program at 200 billion pounds ($314 billion) this month. It also left its key interest rate at 0.5 percent, helping to provide support to the housing market. Data from the central bank yesterday showed U.K. mortgage approvals rose in August to the highest in 20 months.
A gauge of Britons’ view of their personal financial situation over the next 12 months rose 1 point to minus 10, while a measure of their view of the economy over the past year slipped 1 point to minus 58 in September from August, GfK said.
The research group questioned 2,007 Britons between Sept. 2 and Sept. 11 for today’s survey.
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