Home News UK midcaps set for weekly loss as consumer confidence slumps to record low

UK midcaps set for weekly loss as consumer confidence slumps to record low

by jcp
gawdo

By Sruthi Shankar and Johann M Cherian

(Reuters) -UK midcap stocks were set for their worst weekly performance since early July on Friday, while the blue-chip index dipped after data showed consumer sentiment hit a record low in August amid a worsening cost-of-living crisis.

The FTSE 250 index, more exposed to the domestic economy, slid 0.8% and was on course for weekly losses of over 1.8%. Airlines, industrials and retailers were among the worst performing stocks in the index.

The exporter-heavy FTSE 100 slipped 0.3%, with losses capped by sterling’s tumble to a four-week low. [GBP/]

British consumer sentiment in August fell to its lowest since at least 1974, a survey showed, as households feel “a sense of exasperation” about the soaring costs.

Another set showed British shoppers spent more than expected in July as many were enticed by online shopping promotions. However, the numbers offered no respite for retail stocks, with the sector down 1.9% and longer-term trend looking dismal.

“The UK consumer hasn’t necessarily felt the pinch yet. The big pinch is going to be the energy price, which is due to go up in October,” said Jon Hudson, fund manager of the Premier Miton UK Growth Fund.

“It’s going to be very difficult for UK consumer-exposed stocks and you’d probably expect more earnings downgrades to come through, particularly over the winter.”

Joules Group slumped 34.7% after the fashion retailer said that it would plunge to an annual loss, as the recent hot weather and cost-of-living crisis hit demand for its mainstay outerwear and rainwear.

Global stock markets have faltered this week after a strong rally since June lows, as central bank policymakers backed aggressive interest rate hikes to tame soaring inflation despite signs of slowing economic growth.

Traders are betting the Bank of England will raise interest rate by half a percentage point next month after annual consumer price inflation jumped to 10.1% in July, its highest in four decades.

(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru: Editing by Sriraj Kalluvila and Dhanya Ann Thoppil)

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