Latest news with #GfKConsumerConfidenceBarometer
Fibre2Fashion
6 days ago
- Business
- Fibre2Fashion
UK consumer confidence edges up in June, but inflation fears persist
Consumer confidence in UK showed modest improvement in June 2025. The overall index score rose by 2 points to -18, marking a gradual rebound from May's -20 and April's -23, though sentiment remains weaker than in June 2024 (-14), according to Gfk. Consumers' outlook on their personal financial situation held steady. Confidence regarding the past 12 months remained unchanged at -7, while expectations for the next 12 months stood at +2, showing no movement since May, as per the latest GfK Consumer Confidence Barometer powered by the Nuremberg Institute for Market Decisions (NIM). 'This is driven by improvements in how consumers see the general economy, with scores up three points (looking at last year) and up by five points (looking at the next 12 months). Consumers have been resolute in their views on their wallets with June's personal financial situation scores (past and future) unchanged from May,' said Neil Bellamy, consumer insights director at GfK, an NIQ Company . UK consumer confidence rose modestly in June 2025, with the overall index up 2 points to -18, as per GfK. While views on personal finances stayed flat, perceptions of the general economy improved. However, inflation, rising petrol prices, and trade uncertainties continue to weigh on sentiment. The Major Purchase Index remained steady, while the savings index dipped slightly. 'Yet confidence is still fragile because the dark shadow of inflation is a day-to-day challenge for so many of us. With petrol prices set to rise in the coming weeks following the escalation of the conflict in the Middle East, and with ongoing uncertainty as to the full impact of tariffs, there is still much that could negatively impact consumers. With so much volatility, now is certainly not the time to hope for the proverbial 'light at the end of the tunnel,' added Bellamy. Public perception of the general economic situation showed clearer signs of improvement. The view of the past 12 months improved to -43 (up 3 points), while expectations for the coming year rose to -28 (up 5 points). However, both figures remain well below June 2024 levels of -32 and -11, respectively. The Major Purchase Index, which gauges consumers' willingness to make large purchases, held steady at -16. Although better than April's -19, it remains weaker than June 2024's -23. Meanwhile, the savings index slipped by 1 point to 27, continuing its decline from April's 30, though still higher than the 22 recorded a year ago. The data suggest that while confidence is inching upwards, persistent concerns over inflation, geopolitical tensions, and trade-related uncertainties continue to weigh heavily on UK households. Fibre2Fashion News Desk (SG)
Mid East Info
06-05-2025
- Business
- Mid East Info
BoE Preview: rate cut expected, but pace of easing remains uncertain
By Daniela Sabin Hathorn, senior market analyst at The Bank of England (BoE) is widely expected to deliver a rate cut at its upcoming meeting, as policymakers balance weak domestic growth with the inflationary risks stemming from global trade tensions. At its March meeting, the Monetary Policy Committee (MPC) voted 8-1 to keep the Bank Rate at 4.5%, with only external member Swati Dhingra advocating for a 25-basis-point cut. At that time, persistently high inflation was a key factor in maintaining the current rate. Headline CPI had climbed back to 3% in January, and the BoE projects it could rise further to 3.75% by summer. Geopolitical uncertainty and renewed U.S. tariff threats have also prompted a cautious stance, even as domestic data shows lacklustre growth and hiring plans, while wage pressures in services remain elevated. Governor Andrew Bailey reiterated the need for prudence, noting that while easing is on the table, it must be guided by 'accumulating evidence that price pressures are easing,' and emphasizing that there is 'no presumption about cuts at the next few meetings.' Economic Backdrop: Mixed Signals The latest data indicates a modest rebound in economic activity. February 2025 saw UK GDP increase by 0.5% month-over-month, with growth broad-based across services, production, and construction. This helped lift overall output by 0.6% over the December–February quarter. Revised figures also show that the economy expanded by 1.5% on a quarterly basis, marking a notable recovery from earlier weakness. However, sentiment among households has deteriorated. The GfK Consumer Confidence Barometer fell four points to –23 in April, its lowest level since November 2023, reflecting growing pessimism about the economic outlook. Together, these trends suggest an economy that is growing, but increasingly constrained by external shocks, rising household costs, and real-income pressure. Market Focus: Clarity on Policy Path As it stands, the March meeting set a higher bar for a rapid follow-up cut, however the MPC will likely wait for confirmation from April's CPI release (due 21 May) and additional evidence of wage disinflation before moving more aggressively. While the policy bias remains tilted toward easing—given weak growth and restrictive monetary conditions—rate-setters are expected to proceed more cautiously than markets had priced in earlier this year. As always, market participants will scrutinize the accompanying policy statement and press conference for subtle shifts in tone. Two key phrases will be particularly important in shaping expectations: 'Gradual and limited' path This phrase signals a slow and measured approach to rate cuts, with the terminal rate likely higher than pre-Covid levels. If retained, it implies a continued cautious stance—possibly one cut per quarter—suggesting Bank Rate may bottom near 3.75%. If the language is softened to 'balanced' or 'data-dependent,' it could be interpreted as a willingness to accelerate easing, likely weakening the pound and lowering gilt yields. 'Higher for longer risks' This expression indicates concern about persistent inflation, justifying a prolonged period of restrictive rates. Its retention would underscore a hawkish tone, potentially limiting sterling downside even if a cut is delivered. A softened tone—such as referring to inflation risks as 'two-sided' or stating that risks have 'eased'—would be read as a dovish pivot and could pressure the pound. The post-decision press conference will be another key moment for markets, offering additional clarity on the direction of policy. Traders will parse every nuance for signs of a dovish or hawkish tilt. Scenario Analysis: Three Potential Outcomes 1. Baseline (Neutral Tone): If the MPC maintains both 'gradual and limited' and 'higher for longer' language and keeps quantitative tightening (QT) capped at £100 billion, markets are likely to view the decision as a steady, data-dependent path. Expect pricing for two more 25bp cuts this year. 2. Dovish Tilt: Dropping the 'gradual' qualifier, softening inflation warnings, and hinting at slower gilt sales would signal a stronger response to growth headwinds. Markets would likely anticipate a faster easing cycle, sending GBP lower and lifting short-term bond prices. 3. Hawkish Surprise: If both phrases are retained and QT remains 'on track,' the BoE could be signalling concern over lingering inflation pressures. This would likely delay expectations for the next cut until August, lifting the pound and pushing short-term yields higher. GBP/USD Outlook: Watch for Volatility Heading into the meeting GBP/USD is hovering around the 1.33 mark after being rejected at the 2024 high earlier last week. The bias remains positive however the pair had been toying with overbought levels for a while as the RSI kept on pushing higher. The reversal seems technical, but traders should watch out for the Federal Reserve meeting on Wednesday as it could increase volatility heading into the BoE meeting. A drop to 1.32 is still possible from here but the momentum should reject any further downside if the bias is to remain bullish going forward. GBP/USD daily chart: Past performance is not a reliable indicator of future results.
