Where next for GBP as consumer confidence rises but inflation remains a challenge?
Despite UK consumer confidence rising to a 10-month high, the Gfk consumer confidence index shows that half of consumers are using savings to pay for everyday items and one in 10 are borrowing to survive.
(Video Transcript)
Consumer confidence rises
After recent signs of improvement in the UK economy, Gfk's headline Consumer Confidence Index has risen by more than expected to a 10-month high in the month of February.
The index increased to a -38 in February from a -45 the previous month. Economists had expected to give rise to a -43, now seven point increase. That's the biggest month-on-month improvement in almost two years.
But there is still a long way to go to the -7 recorded back in February 2020, just before the coronavirus pandemic hit back in 2020.
GBP/USD
If we look at what's happening at the moment with sterling, we can see there is a little bit of an uptick at the moment in sterling against the US dollar.
But the problem with this is the reason why we've seen sterling under pressure is really not recovered recently is because the cost of living crisis remains a challenge for UK consumers.
The survey out today shows that nearly half of consumers are now digging into their savings to cover essential costs and one in 10 are taking on debt to pay for essentials.
GBP/EUR
Quick update on where we are in terms of the move for sterling against the euro. Again, this downward pressure seems to be prevailing. We've got a little bit of gains for sterling at the moment against the euro, but broadly speaking, this is a trend which is a slow grind, lower for sterling against the European single currency.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
