Aurelia Butler

LONDON (Reuters) – British consumer sentiment fell for the first time in three months in January, returning near to historic lows as concerns about the economy and the soaring cost of living tightened the squeeze on household finances, research showed on Friday.Market research firm GfK said its measure of confidence declined 3 points to -45, the third lowest reading since records started in 1974. A Reuters poll of economists forecast a rise to -40 from December’s -42.The GfK index, which is not seasonally adjusted, usually rises in January. Sentiment towards major purchases declined especially sharply this month. GRAPHIC-UK consumer confidence slides back towards record low: GfK (https://www.reuters.com/graphics/BRITAIN-ECONOMY/CONSUMERSENTIMENT/gdvzqwayypw/chart_eikon.jpg) The survey results highlight the impact that rising prices and economic uncertainty is having on UK households, with more consumers reporting a deterioration in their personal finances.Energy bills and food prices in have escalated rapidly in recent months, eating away at households’ disposable incomes.Food prices jumped 16.8% year-on-year in December – the sharpest increase since September 1977, according to the Office for National Statistics. The cost of an average household energy bill in Britain is set to rise to 3,000 pounds ($3,697.50) a year from April. Finance minister Jeremy Hunt and Prime Minister Rishi Sunak scaled back a two-year energy support scheme for households, which would have kept annual bills at 2,500 pounds, that had been promised by the previous leader Liz Truss. “With inflation continuing to swallow up pay rises, and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good,” Joe Staton, GfK’s client strategy director, said.A six point fall in the sub-index of consumers’ willingness to make expensive purchases showed how caution could slow Britain’s economy as the risk of recession lingers.While British inflation eased last month after hitting a 41-year high in October, financial markets expect the Bank of England to raise its key interest rate to 4% in February from 3.5%. The central bank hiked rates at its last 9 meetings in an attempt to bring double-digit inflation back to its 2% target.The survey of 2,000 people was conducted between Jan. 3 and Jan. 12. ($1 = 0.8114 pounds) More

British consumer confidence fell in January after improving in the last quarter of 2022, as inflation and high energy bills continued to erode household incomes, new data show.GfK’s monthly consumer confidence index, a measure of how people view their personal finances and wider economic prospects, slipped to minus 45 this month, three points down on December. “One thing we can be sure of is that 2023 promises to be a bumpy ride,” said Joe Staton, client strategy director at GfK. With rising prices “continuing to swallow up pay rises, and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good”, he said. Inflation eased marginally to 10.5 per cent in December, down from a 41-year high of 11.1 per cent in October, according to the Office for National Statistics. But underlying price pressures remained high while food inflation stood at 16.9 per cent, the fastest pace since records began in 1977. Levels of confidence had been steadily rising after sentiment dropped to a record low of minus 49 in September 2022. International energy prices jumped after Russia’s invasion of Ukraine in February 2022, accelerating the rate of UK inflation. Living costs continued to rise this winter, leaving many with little to spare after paying food and household bills.Britons were pessimistic about the economic outlook this coming year, the data showed, with the index standing at minus 54, 22 points lower than last January.

However, Stanton noted that a small rise in people’s confidence in their personal finances offered “a glimmer of hope”, although levels were down on the same month last year.The index for major purchases registered the largest monthly decline, down to minus 40 in January, six points below the previous month. This data comes as the quarterly Credit Conditions Survey, released by the Bank of England on Thursday, showed that demand for mortgages fell at the fastest rate on record in the final quarter of 2022, excluding the second quarter of 2020, when the Covid-19 pandemic forced the housing market to temporarily close. More

The country’s producer price index stood 6% higher in December than a year ago, compared with 6.2% in November, according to the Bank of Korea.The annual rate slowed for a sixth consecutive month, from a near 14-year high of 10% in June, and marked the slowest since April 2021.The index fell 0.3% on a monthly basis, at the same pace seen in November, in its second month of declines.For the whole of 2022, producer prices rose at an annual rate of 8.4%, faster than 6.4% in 2021 and the fastest in 14 years. More