U.K. consumer confidence continues to rise

British consumer confidence rose for a third straight month in February, continuing an upward trend as Britons anticipate a stronger economy now that an impasse in the Brexit process has been resolved.

An index of consumer confidence gathered by market-research firm GfK rose two points to minus seven in January, beating a consensus forecast of economists who had predicted it would remain steady at minus nine.

The index was pulled higher by continued improvements in how the British public feels about the strength of the economy. A sub-index measuring consumer views on the state of the economy over the next year rose three points, while one gauging consumer perceptions of the economy for the preceding year rose five points.

The improving public mood came "against a February backdrop of rising wages and house prices, low unemployment and stable inflation," said Joe Staton, client strategy director at GfK. "Although the index remains south of positive, the trajectory remains upwards," he added.

After languishing in negative territory for many months, the index has gradually risen since December 2019 when an election awarded the governing Conservative Party an improved majority in parliament and paved the way for the nation’s departure from the European Union at the end of January.

The upward trend in consumer confidence could yet falter, however, with tense and highly pressured negotiations between the U.K. and EU over future trading plans set to begin in March. That could mean the return of Brexit to the headlines and revive fears of a disruptive break in the two sides’ trading arrangements.

Also at risk of effecting consumer sentiment was the spreading coronavirus epidemic, Mr. Staton said. The GfK survey was conducted in the first two weeks of February, before concerns emerged that the deadly virus was spreading significantly beyond China’s borders, including spikes in cases in Italy and Iran. "The only ‘known unknown’ is the potential impact of coronavirus on behavior, confidence and spending patterns," Mr. Staton said.

GfK surveyed 2,001 adults between the dates of Feb. 3 and Feb. 14 and produced the index on behalf of the European Commission.

Write to Will Horner at [email protected]

Source: Read Full Article