MNI DATA SURVEY: UK Dec GfK Consumer Sentiment

By Jamie Satchithanantham

     LONDON (MNI) - The UK consumer has had a bad 2017. Prices have risen

relentlessly while wage growth has not accelerated, all against an unchanging

backdrop of economic and political uncertainty.

     You could argue that the above, with the exception of wage growth (where

the symptoms are more structural), were induced by the Brexit vote cast 18

months ago. 

     While 2018 should paint a better picture, as the associated currency effect

fades and a potentially softer Brexit takes shape, December's reading of the GfK

sentiment index -- placed by analysts at -12 for the second straight month -- is

nailed on to confirm yet another year submerged beneath the neutral-zero level. 

     Since the last survey, consumer confidence may have been boosted by any of

the breakthrough in Brexit negotiations, a series of (limited) fiscal measures

implemented in the Chancellor's Autumn Budget and/or the festive season (as the

index is not seasonally adjusted). 

     On the flip side, the Bank of England's hike in interest rates would have

been known about in November although typically higher mortgage payments would

not have hit borrowers until the start of December.

     Of the eight analysts polled in our survey, three expected sentiment to

come in unchanged from November's reading (which equalled the level set last

July immediately after the EU referendum) while the same number argue for a

modest improvement.    

     For Lloyds (-13) and Standard Chartered (-15), the picture is a little

bleaker with sentiment possibly finding a little further room to fall at the end

of 2017.   

     Consumers are the drivers of the UK economy which in turn is dominated by

services - going to the movies or eating out. The less inclined consumers feel

to partake in such activities, the weaker GDP growth. 

     Those concerned will hope for a better 2018, enabling the UK to capitalise

more on the upswing in global growth that most other advanced economies seem to

be enjoying.          

-----------------------------

                          Dec

                          GfK

                     Consumer

                    Sentiment

Date Out               21-Dec

Median                 -12.00

Forecast High           -10.0

Forecast Low            -15.0

Standard Deviation        1.6

Count                       8

Prior                   -12.0

Capital Economics       -12.0

HSBC                    -10.0

Investec                -10.0

JP Morgan               -11.0

Lloyds TSB              -13.0

Oxford Economics        -12.0

Pantheon                -12.0

Standard Chartered      -15.0

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

[TOPICS: MTABLE,MABDT$,M$B$$$,M$E$$$]