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Title: U.K. Consumer Confidence Hits All-Time Low but Retail Sales Bounce

May 20, 2022 03:08AM ET

By: AnalysisWatch

Consumer confidence in the United Kingdom fell this month to a new record low as the cost-of-living crisis continues to weigh on public sentiment.

According to market research firm GfK, confidence is lower now than at any time during the 2008 financial crisis or the pandemic two years ago, even though unemployment is at a 50-year low thanks to soaring inflation.

This week, Bank of England Governor Andrew Bailey told Parliament that the Bank can do little to prevent inflation from exceeding 10% by the end of the year, citing rising global energy and food prices.

"There is nothing on the economic horizon to inspire optimism in the near future," said Joe Straton, director of client strategy at GfK.

However, the pound rose slightly in early London trading after official data showed a surprise increase in retail sales in April. Total and core sales increased by 1.4 percent in April, with a further 0.2 percent drop expected. However, the Office for National Statistics reported that quarterly sales fell 0.3 percent, continuing a decline that began last summer.

The pound was up 0.1 percent to $1.2475 at 2:55 a.m.

The ONS said the increase was mainly due to increased spending on alcohol and tobacco in supermarkets, while increased clothing sales drove online sales up 3.7 percent. While most consumer spending has returned to pre-pandemic levels, the ONS found that the shift to online shopping continues unabated. Online sales now account for more than 27% of total sales, far exceeding the pre-pandemic level of 19.9%.

Title: Inflation crimps Indian firms as rural millions cut spending

May 20, 2022 03:15AM ET

By: AnalysisWatch

Rising inflation is forcing many poor Indians to cut back on spending, threatening companies like Godrej Appliances, which saw record sales as recently as March and April after a brutal heat wave drove up demand for its refrigeration products.

The Ukraine crisis and disruption to the global supply chain have driven up prices around the world, but people in developing countries like India are more vulnerable to even small price increases that can blow their meager budgets.

The price drop came quickly after demand in the bulk segment surged in March and remained good in April, he added.

Indian wholesale and consumer prices rose at the fastest pace in years, prompting the central bank to raise interest rates at an unscheduled meeting this month, and another meeting is likely next month.

Godrej, which made India's first refrigerator in 1958, plans to raise prices if possible to offset the cost of raw materials, but fears that could hurt rural demand, where two-thirds of India's nearly 1.4 billion people live.

In an earnings call this month, Dabur India Ltd, a big seller of everything from shampoos and toothpaste to honey and fruit juices, said in an earnings call this month that demand is likely to remain weak in coming quarters.

Hindustan Unilever Ltd, owner of brands seen everywhere in India such as Dove, Vaseline, and Horlicks, said late last month that sales are falling fast, especially in rural areas.

Inflation will be a major headache for Prime Minister Narendra Modi's government ahead of assembly elections in several Indian states this year and early next, particularly in his western home state of Gujarat.

However, demand in Indian cities has held up much better, according to several companies.

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