Consumer confidence remains stubbornly low

Commenting on UK retail sales rebounding in January, Tom Hopkins, Portfolio Manager at BRI Wealth Management, said:

“UK retail sales rebounded in January coming in at +0.5%, beating consensus expectations considerably. This positive January figure follows the sharpest December decline since records began in 1997 and makes for a hat-trick of positive surprises from UK economic data this week. Interestingly this data follows a similar pattern of strength we saw in the US consumer data earlier this week.

“Today’s data potentially makes a March increase in the Bank of England Bank Rate more likely than otherwise. That said, we wouldn’t read too much into the monthly figures.

Consumers still plan to tighten or cut discretionary spending over the year ahead. Many retailers discounted heavily to entice consumer spending, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes as shoppers continue to look for value.

Consumer confidence remains stubbornly low, and looming rises in household bills and mortgages mean discretionary spending will remain weak.”