U.K. consumer sentiment likely to fall again in near term

The latest GfK consumer sentiment indicator for the U.K. was consistent with expectations, reversing the rise of the prior month and ticking back down to -10 in October. Consumers’ assessment of the economy deteriorated a bit, with relevant indicators moving lower towards the bottom of the last 12 months’ range.

But the survey measures related to personal finances stayed slightly changed while the climate for major purchases improved to the most positive in five months, though still at a comparatively low level by recent standards. Therefore, in spite of strong employment gains, concerns about economic conditions, likely not least related to the fact that wages are falling in real terms, are dragging consumer sentiment, noted Daiwa Capital Markets Research.

“And with the BoE likely to raise Bank Rate to 0.5 percent later this week, we fear that UK consumer confidence might take another hit over the near term”, added Daiwa Capital Markets Research.

At 20:00 GMT the FxWirePro's Hourly Strength Index of British Pound was bullish at 97.1526, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 57.9308. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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