The rather meek and futile half point rise in interest rates by the Bank of England yesterday (Thursday 15 December) will affect people with mortgages, but will it make them even more cross? It seems the people are having their say.
The GfK consumer confidence index ...
"Whoa Whoa Whoa." A prickly consumer interrupted. "Who? What? Why are we listening to them? What does 'GfK' even stand for?"
Apologies. The 'Growth from Knowledge' consumer confidence index registered a minus 44 score in November, scrabbling up to a still chilly minus 42 in December, being the eighth month in a row the index has measured -40 or below (the exact same temperature as the NTI newsroom's communal break space this morning). Give or take the price of butter this reflects public confidence in the economy being at a 50-year low.
As any regular reader of the NTI's news bulletins well knows, the index is based on a monthly poll of 2,000 individuals and asks questions on their personal financial situation and economic sentiment, their likelihood of making big household purchases and whether they think now is a good time to save.
"Save? Shut up and go away," some of them said from behind a rapidly closing door as they were surveyed at the beginning of this month. The same voice could just be heard saying on the other side of the door: "Now, whose turn is it to eat today?" It is not really a story and the index is only telling us what we already know, but the cost of living crisis, high inflation, energy bills and France being in the final of the World Cup are beginning to bite like Jack Frost.
Other numbers tell a more relevant story. It was reported this morning that retail sales fell unexpectedly in November as Black Friday discounts and early Christmas shopping were not enough to offset the impact of soaring prices.
Total sales of goods and services across the economy fell by 0.4 per cent last month, the latest Office for National Statistics figures show. Economists polled by Reuters had predicted a rise of 0.3 per cent, but they have no clue, as all of their previous predictive behaviour this year has identified time and again. Notably, online shopping sales continued their downward trend, falling by 2.8 per cent in November. Sales of food items continues to grow (maybe because everything is so much more expensive than it used to be - 14.8 per cent more expensive, to be accurate), but last month there was a 6.2 per cent fall in the sales of “other goods”, which includes big ticket items such as computers, driving down total volumes.
Lisa Hooker, industry leader for consumer markets at PwC, said: “Excluding petrol, there was a 3.6 per cent increase in pounds spent compared with this time last year, but a 5.9 per cent decline in the volume of goods bought." This is interesting, of course, but actually we just like Lisa's name ...
The only news around today that might slightly cheer chilly consumers is the report that bankers in the City of London and on Wall Street are bracing themselves for a drop in their bonuses as firms wrestle with a slump in dealmaking amid economic turmoil. It is not clear, yet, how big the fall may be, but Goldman Sachs give us all hope, saying they have reduced their bonus pool by 40 per cent this year.
What EVER will Rodney, Crispin and Alicia DO? Is it only business class and a shared pool for them this year?
