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Consumer confidence stalled in March but a shift in attitudes to personal finance provided optimism for the future, according to a closely watched survery released this morning.
The GfK monthly consumer confidence index remained unchanged at -21 this month, which followed a two-point dip in February.
The market research agency said that looking back to last year and it was clear the improvements in consumer confidence seen most months since January 2023 had “vanished”.
The major purchase index also dropped two points to -27.
However, the forecast for personal finances over the next 12 months moved into positive territory in March, climbing from 0 to +2. It is the first positive and highest score since December 2021, and 23 points higher than this time last year.
“This is welcome news given the challenges faced by Britons of fiscal drag, higher costs for fuel, rising council taxes and utilities eroding any increases in wages or other income,” GfK client strategy director Joe Staton said.
The measure for the general economic situation over the next 12 months also nudged upwards from -24 to -23.
“Are we temporarily on pause, or are consumers about to press ‘reverse’?,” Staton asked.
“In the run-up to the next UK general election, these are important questions for the future health of the economy.”
Morning update
Retail sales in the UK were flat in February as wet weather and persistent cost-of-living worries kept consumers away from the high street.
The latest figures from the Office for National Statistics were better than expectations for a decline in sales, with 0% growth in sales volumes followinig an rise of 3.6% in January.
A rise in clothing sales was offset by falling food and fuel sales, the official figures showed.
Sales volumes fell by 0.4% in the three months to February 2024 compared with the previous three months and by 1% versus a year ago.
Kris Hamer, director of insight at the British Retail Consortium, said sales were hit by the wettest February on record, dampening demand and depressing footfall.
“This was felt most in the more high-ticket categories such as furniture and electricals,” he added. “Meanwhile, cosmetics and toiletries continued to sell well as popular brands go from strength to strength. Retailers are hopeful that with warmer weather and potential interest rate cuts around the corner, consumer confidence will soon spring back.”
The FTSE 100 continued its momentum after big gain yesterday, rising 0.6% to 7,930.64pts.
Bakkavor led the risers this morning, up 5.5% to 106p, while Virgin Wines UK climbed 2.6% to 39p, Hilton Food Group is up 2.3% to 845p, THG is up 1.8% to 59.1p and Reckitt Benckiser is up 1.8% to 4,378p.
Ocado is down 1.8% to 468p, while Naked Wines is down 1% to 54.2p.
Yesterday in the City
The FTSE 100 soared 1.9% to 7,884.93pts as the Bank of England held interest rates steady but hinted at future cuts.
It was also a good day for retail and fmcg yesterday, with risers including Ocado, up 2.1% to 476.7p, Nichols, up 2.3% to 1,000p, Compass Group, up 3.9% to 2,238p, Marks & Spencer, up 3.5% to 249.3p, and WH Smith, up 3.7% to 1,258p
Bakkavor was one of the few fallers, down 3.3% to 102p, while McBride ended 2% behind at 98p and Fever-Tree dropped 1.1% to 1,084.4p
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