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GfK: Consumer sentiment declines for a third consecutive month

UK consumer confidence unexpectedly fell for a third month in December as Britons’ outlook on the economy worsened and the climate for purchases of big-ticket items deteriorated.

A consumer sentiment index by GfK NOP Ltd. dropped 1 point from November to minus 13, the London-based research group said today. The median forecast of 24 economists in a Bloomberg News survey was for a 1-point increase to minus 11.

“Although a single point move is not statistically significant, what matters is that the index has fallen for three months in a row, and we can say there is a downwards trend,” said Nick Moon, managing director of social research at GfK. With “good news” on the economy, the weakness “most likely results from people’s sense of how well, or rather badly, off they personally feel.”

Utility-price increases and inflation that’s outpacing wage growth is squeezing households and hitting sales in British shops. Bank of England Governor Mark Carney said this week that the recovery has further to go before the economy is strong enough to withstand interest-rate increases and policy makers will maintain stimulus “for some time.”

“Growth in household demand is likely to remain muted,” Blerina Uruci, an economist at Barclays Plc, wrote in a note to clients. “Spending is limited by continued weak growth in disposable incomes.”

The pound fell for a second day versus the dollar, declining 0.2 percent to $1.6340 at 8:35 a.m. London time.

GfK’s measure of Britons’ sentiment toward the economy over the next 12 months dropped 3 points to minus 4, while the gauge of the climate for making major purchases declined 4 points to minus 17.

The research company interviewed 2,016 people for the European Commission from Nov. 29 to Dec. 16.

Source : Scott Hamilton - Bloomberg

20 December 2013
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