Title: U.K. Consumer Confidence Hits All-Time Low but Retail Sales Bounce
May 20, 2022 03:08AM ET
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%.