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British Pound Slips As GfK Finds UK Consumers Gloomy

British Pound Slips As GfK Finds UK Consumers Gloomy

David Cottle, Analyst

Talking Points

  • UK consumers are nearly as gloomy as they were after Brexit, GfK says
  • However, by some measures businesses are a lot more cheerful
  • Sterling slipped FX markets seem to be accentuating the negative

The Britsh Pound slipped a little against the US Dollar in Asian trade on Wednesday as a closely watched survey found UK consumers nearly as gloomuy as they’ve been since June’s Brexit shocker.

Market research giant GfK said its gauge of consumer conidence fell to -8 in November from -3 in October. That’s the lowest point since July when it hit -12 in the Brexit aftermath. The index measuring major purchases fell to 5 from 14, and also hit its lowest point since July.

The figures will be of deep concern to retailers as the crucial Christmas sales period looms, although recent official data have shown cosnsumers little inclined to rein in spending. The outcome was also weaker then the -4 level which markets had been expecting.

Business confidence levels also slipped, according to a separate survey conducted by Lloyds Bank Commercial Banking, which painted a rather mixed picture.

Lloyds said the five-point decrease in its index followed a significant fall in economic optimism, which suggests that the recovery which followed the EU vote is starting to fade. However, confusingly, firms were more upbeat about their own business prospects. That subindex improved to its highest level since January.

55% of firms expect business prospects to improve while only 5% expected a weakeer outlook.

Sterling seemed to take a while to move following the figures, but GBP/USD slipped to 1.2486 shortly after them, from 1.2492.

Sterling slips back

Chart compiled using TradingView

--- Written by David Cottle, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.