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MNI China Daily Summary: Thursday, March 23
MNI BRIEF: Taiwan's CBC Hikes Policy Rate 12.5bp to 1.875%
MNI INTERVIEW: No 'Green Shoots' Yet For UK Consumer-Gfk
There will be little Christmas cheer for UK household budgets this December, as higher inflation, rising mortgage costs and soaring energy prices all weigh on sentiment, keeping consumer confidence close to the lowest levels in half a century, the head of a leading survey published Friday told MNI.
"There are no signs of green shoots yet, they are still some way off," Joe Staton, Gfk's Client Strategy director, said in an interview.
Sentiment recovered somewhat in the month, rising 2 points to -42, according to the Gfk Consumer Confidence Index, but still sits close to the -47 record low seen in October.
Staton said he was "ambivalent at best to the data, and overall still pessimistic" for the outlook. There are still headwinds for households in coming months and "everyone is likely to feel a significant degree of pain next year".
TOUGH ROAD AHEAD
"December marks the eighth month in a row in which the Index has bumped along at -40 or worse, the first time this has happened since our records began nearly 50 years ago," Staton said, adding that there were "still plenty of warning signs of tough road ahead", with the UK not out of the recessionary woods.
"Real wages are falling as inflation continues to bite hard, further straining the discretionary budget of many households," he added, saying that was having a severe impact on the outlook for personal finances, a key metric in the index that Staton watches closely.
The forecast for personal finances over the next 12 months stood at -29, unchanged on November's read, but 30 points lower than in December 2021.
There was further bad news for mortgage holders on Thursday as the Bank of England raised rates to 3.5%. Earlier this week, the central bank warned the average monthly payment for fixed income mortgage holders would probably rise from a current GBP750 to over GBP1000 by late 2023. (MNI BOE WATCH: Internal MPC Members Deliver 50bps Hike)
Overall confidence remains severely depressed, Staton said, with no sign of an early good news boost on the financial outlook, meaning it was unlikely there would be a rebound in confidence anytime soon.
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