Rpt:- MNI INTERVIEW: UK Confidence Up, But Still Depressed-Gfk
Head of Gfk's consumer sentiment survey tells MNI November rally just a 'sigh of relief'.
UK consumer confidence edged higher in November, but it was more an expression of hope' that the economic outlook might avoid further deterioration than a pointer to a sharp upturn in coming months, Joe Staton, the head of GFK's Client Strategy told MNI Thursday.
"This month’s fillip is likely to reflect nothing more than a collective sigh of relief as a new prime minister takes charge following the alarming fiscal antics we saw in September. This is not the end of the beginning," Staton said.
GFK's Overall Index rose three points to -44, but, despite an improvement in all the main sub-indices, it remained close to the record low -47 seen earlier in the Autumn.
UK inflation recently hit a new high, external factors are still negative and more bad news is inevitable, Staton said. Household budgets remain under pressure as prices rise and the prospect of fresh interest rate rises are now pressurising mortgage and rent payments, all as real pay is squeezed further.
SENTIMENT UNDER PRESSURE
"Following (Thursday's) Budget, the Office for Budget Responsibility pointed to an 8% real-terms decline in household income which is going to be a terrible weight on sentiment in coming months," Staton noted.
Staton said he had hoped for stronger signs of a recovery following the weakness in the summer and early autumn, but there were no indications that was likely. "I'd looked for a v-shaped recovery in confidence, but now the best we may be hoping for is a 2010 Nike-swoosh style recovery," he said.
With little relief for consumers in the Budget, sentiment will remain pressured. (See MNI POLICY: BOE Points To 4% Peak At Most, Then Rate Cuts)
"Consumers are looking for a festive cocktail of certainty and optimism not this mishmash of austerity and pessimism. Good news remains in short supply as many people struggle to manage the purse-strings during this protracted and painful cost-of-living crisis.”
"Perhaps an England World Cup win will help kick off the festive season and boost sentiment all round," Staton said.