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Highlights
- The headline UK consumer confidence index fell by two points, from -38 in April to -40 in May.
- Consumer confidence has fallen below the record-low of -39 witnessed during the global financial crisis.
- Pessimism among Brits is rapidly increasing, and the UK economy might be headed towards a recession if the GDP contraction continues amid rising inflation.
Amid the swirling cost-of-living crisis, consumer confidence in the UK has hit its lowest level since the record-keeping began in 1974. The headline UK consumer confidence index fell by two points, from -38 in April to -40 in May.
Consumer confidence has fallen even further below the level of -39 witnessed in 2008 during the global financial crisis when the banking system was collapsing across the globe. Today’s situation is thus even worse than the time when the UK was hit by Covid lockdowns as well as Brexit-related disruptions.
© 2022 Kalkine Media®
According to the polling firm GfK, all the measures related to consumer confidence plummeted in May after the consumers were hit by rising energy bills due to Ofgem’s price cap hike in April. Pessimism among Brits is rapidly increasing, and the UK economy might be headed towards a recession if the GDP contraction continues amid rising inflation.
According to the latest ONS data, the UK inflation level hit a 40-year high level of 9% in April. BoE has warned that the inflation may surpass the 10% mark by the end of this year, while the bank’s Governor Andrew Bailey has given no hope of dealing with the soaring inflation.
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With the growing inflationary pressure, the real incomes of UK households have been falling, thus impacting the overall consumer spending in the country. As per ONS data released on Thursday, credit and debit card spending in the UK declined by 6% last week. Industry data suggests that the spending slump has been going on since April’s rise in energy bills.
Amid the spending slump, UK investors may keep an eye on consumer stocks offering good returns. Here are 3 such consumer stocks that investors may consider.
© 2022 Kalkine Media®
Vivo Energy plc (LON: VVO)
Mcap: £1,799.06 million
One-year return: 33.71%
YTD return: 7.95%
Dividend yield: 3.3%
The shares of the UK-based downstream petroleum firm, Vivo Energy plc, were up by 0.28% as the market opened at around 8:00 AM (GMT+1) on 20 May 2022, at GBX 142.40. Over the last one year, the FTSE 250 company has provided its shareholders with a return of 33.71% as of 20 May 2022, while its year-to-date return stands at 7.95%. The company’s market cap stands at £1,799.06 million as of 20 May 2022, and it is currently offering a dividend yield of 3.3% a year.
British American Tobacco plc (LON: BATS)
Mcap: £77,950.57 million
One-year return: 24.28%
YTD return: 26.36%
Dividend yield: 6.3%
The shares of one of the leading cigarette manufacturers in the world, British American Tobacco plc, were up by 0.63% as the market opened at around 8:00 AM (GMT+1) on 20 May 2022, at GBX 3,453.00. Over the last one year, the FTSE 100 company has provided its shareholders with a return of 24.28% as of 20 May 2022, while its year-to-date return stands at 26.36%. The company’s market cap stands at £77,950.57 million as of 20 May 2022, and it is currently offering a dividend yield of 6.3% a year.
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Coats Group plc (LON: COA)
Mcap: £1,138.82 million
One-year return: 25.63%
YTD return: 13.47%
Dividend yield: 2.2%
The shares of the UK-based producer of eco-friendly sewing threads, Coats Group plc, were down by 0.51% as the market opened at around 8:00 AM (GMT+1) on 20 May 2022, at GBX 78.00. Over the last one year, the FTSE 250 company has provided its shareholders with a return of 25.63% as of 20 May 2022, while its year-to-date return stands at 13.47%. The company’s market cap stands at £1,138.82 million as of 20 May 2022, and it is currently offering a dividend yield of 2.2% a year.
Tags: inflation, consumer stocks, consumer confidence
Meta keywords: consumer confidence, inflation, ONS, BoE, Ofgem, GfK, energy price cap, recession, UK GDP, VVO, BATS, COA, FTSE 100, FTSE 250
Meta description: The headline UK consumer confidence index declined by two points, from -38 in April to -40 in May, falling below the record-low of -39 observed during the global financial crisis of 2008.
