UK consumer under pressure
UK consumer confidence and retail sales readings are down heavily with the high cost of living continuing to squeeze the consumer.
Gfk consumer confidence fell to -30 in October from -21 in the prior month, while economists had anticipated the survey to improve to -20. All five components dropped. Expectations for the UK economy over the next 12 months fell 8 points to -32, while the outlook for personal finances dropped to -8 from -2. Meanwhile UK retail sales fell more than expected in September. Retail volumes slipped 0.9% on month, having risen 0.4% in August. Sales were expected to slip 0.4% on month. Food-store sales increased slightly, but elsewhere they fell amid the high cost of living, with accelerating costs of heating and petrol, the surge of mortgage and rental rates, a slowing jobs market and now the uncertainties posed by the conflict in the Middle East all contributing to the growing unease.
(AI Video Transcript)
UK economy overview
The UK is experiencing a drop in consumer confidence, which means that people are feeling less certain about the economy. In a recent survey, it was found that people's expectations for the UK economy over the next year and their outlook for their own finances have both decreased. This might be because things like heating and petrol costs, as well as mortgage rates, are going up, and there are fewer job opportunities.
Not only that, but retail sales in the UK have also fallen more than expected. This is because the high cost of living is making it harder for people to spend money. In particular, sales of autumn clothing have been affected by the warm weather. Food store sales have seen a small increase, but sales in other sectors are taking a hit.
Decreases in consumer confidence
These decreases in consumer confidence and retail sales are affecting the value of the British pound. The pound is getting weaker compared to the US dollar and the euro. In fact, it is getting close to breaking an important level of support that was established on October 4th. After that, the next level of support is at 1.1805. This means that the weakening pound is making it more expensive for people in the UK to buy things from other countries, and it is also affecting the value of money that travelers might have.
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