Inflation & interest rates fear dampen UK consumer confidence

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Inflation & interest rates fear dampen UK consumer confidence

 Inflation & interest rates fear dampen UK consumer confidence
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Highlights

  • The consumer confidence in the UK deteriorated in January 2022 as people became more pessimistic, as indicated by the GfK Consumer Confidence index.
  • The latest reading was the lowest since February 2021, mainly due to rising inflation, which is currently at a 30-year high at 5.4%.

Consumer confidence in the UK deteriorated in January 2022 as people became more pessimistic, as indicated by the GfK Consumer Confidence index. The index reading was at -19 in January 2022, down by four points, indicating lower consumer confidence amid a higher inflation rate, which led to a rise in the cost of living.

The survey conducted between 4 to 12 January includes around 2,000 individuals from different age groups and genders, ensuring that the sample size is representative of the entire UK population. The latest reading was the lowest since February 2021, mainly due to rising inflation, which is currently at a 30-year high at 5.4% as of December. Also, consumer confidence was lower because of the possibility of an interest rate hike by the Bank of England which might increase borrowing costs for consumers.

 Slowdown in consumer confidence

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Let us look at 3 FTSE listed consumer-orientated stocks that might be impacted due to lower consumer confidence numbers:

Unilever Plc (LON: ULVR)

FTSE100 listed company operates one of the largest consumer goods businesses across different countries. It owns and manages many popular brands like Dove, Lifebuoy, and others. The company’s stock price is down by over 7% this week after its £50 billion takeover bid to buy the consumer healthcare business of GSK Plc was rejected. Unilever Plc believes the deal would add value to its existing portfolio and create value for its shareholders. The company will announce its full-year business performance on 10 February 2022.

Unilever Plc’s last close was at GBX 3,655.50 with a market cap of £93,616 million as of 20 January 2022.

Tesco Plc (LON: TSCO)

The supermarket chain operator in the UK also provides banking and insurance services to its consumers.

The company’s business reported robust business performance in 19 weeks ended 8 January 2022, including the Christmas festival. Overall, the group’s retail sale was up by 2.6%. As a result of good performance, the company now expects significant growth in its full year operating profits.

Tesco Plc’s last close was at GBX 287.30 with a market cap of £21,988 million as of 20 January 2022.

Hilton Food Group Plc (LON: HFG)

FTSE250 listed company operates in the food packaging business. Its products are supplied to retail chains and stores across different countries. The company’s full-year business performance was in line with the board’s expectations. Higher revenue was driven by growth in the organic segment.

Moreover, the company has been expanding its business through acquisitions of other companies that have synergies with its existing business. In 2021, four acquisitions were done, including Fairfax Meadow, Dalco, Foppen, and Agito.

Hilton Food Group Plc’s last close was at GBX 1,080 with a market cap of £960.4 million as of 20 January 2022.

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