Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Financial events begin to feel like they are moving "beyond the control" of most people, Joe Staton, Client Strategy Director at GfK told MNI Thursday after the GfK Consumer Confidence Index slumped to -44 in August, its lowest level since records began almost half a century ago.
”That reflects the acute concern concerns of consumers as the cost-of-living soars. A sense of exasperation about the UK’s economy is the biggest driver of these findings," Staton said, pointing out that all sub-indexes are falling.
"These findings point to a sense of capitulation, of financial events moving far beyond the control of ordinary people," he added.
MEDIA GLOOM
According to Staton, the daily dose of dire news on rising prices across the media has certainly weighed on sentiment as "headline after headline shows inflation eroding household buying power and the strain on the personal finances of many in the UK is alarming."
But on a close reading of both the data and the wider news agenda, Staton believes there is little to feel optimistic about. "Just making ends meet has become a nightmare. The crisis of confidence will only worsen as autumn rolls in and the colder months of winter then arrive,” he said.
Underlying the Gfk survey data are increased expectations for even higher inflation ahead. In August 2021, 31% of respondents saw rapidly rising prices a year ahead, with that number now at 53% -- a troubling takeaway for the Bank of England as it monitors expectations across the economy.
On Wednesday, the Office for National Statistics reported that inflation rose 10.1% year-on-year to a fresh 40-year high in July, up from 9.4% in June. The rate exceeded forecasts of an increase of 9.8% y/y and was above the Bank of England's outlook for July. According to Grant Fitzner, the ONS's chief economist, a wide range of price rises drove inflation up again this month.
The retail price index (RPI), the measure used for benchmarking many benefits and services in the coming year, rose 12.3% year-on-year, the highest annual increase since March 1981.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.