When last week’s third quarter Gross Domestic Product figures for the UK came in better-than-expected the Pound was boosted and many began viewing the UK economic situation more positively.
After a five-year high surge in GDP Britain exited its double-dip recession – but some industry experts have urged caution, arguing that the impressive GDP figure could be masking underlying weakness.
Although retail sales statistics released by the Confederation of British Industry demonstrated a 16-week high they came with the warning that ‘uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector.’
Today’s Consumer Sentiment figures could be perceived as backing that viewpoint.
According to research group GfK NOP pessimism increased in October and financial concerns had a hefty impact on Briton’s spending.
Consumer sentiment dropped from minus 28 in September to minus 30 in October whilst a gauge of how consumers view their financial situation progressing over the course of the next twelve months recorded a drop from minus 8 to minus 13. The outlook for the UK economy over the next year and a measure of the climate for making major purchases both dropped 2 points.
Nick Moon, a managing director with GfK, stated: ‘While the Olympics are thought to have boosted GDP in the last quarter, the late simmer boost in consumer sentiment has now faded. The fragility of the recovery is underlined by the fact that people are more worried about their own financial situation over the next 12 months. This certainly doesn’t suggest there will be a spending boom on the back of the official emergence from recession.’
As of 10:05 am
The Pound to Euro exchange rate is currently trading at 1.2395
The Pound to US Dollar exchange rate is currently trading at 1.6114
The Pound to Australian Dollar exchange rate is currently trading at 1.5506
The Euro to US Dollar exchange rate is currently trading at 1.2998
The Euro to Pound exchange rate is currently trading at 0.8066
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