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Consumer confidence rose again in December as lowering inflation underpins more confidence in the UK’s economic prospects for 2024.
GfK’s long-running Consumer Confidence Index increased two points to -22 in December, with all five measures were up in comparison to last month’s announcement.
The index measuring changes in personal finances during the last year is up two points at -14, which is is 14 points better than December 2022.
The forecast for personal finances over the next 12 months increased one point to -2, a notable 27 points higher than this time last year.
The measure for the general economic situation of the country during the last 12 months is up five points at -44, which is 22 points higher than in December 2022 despite being strongly negative.
Expectations for the general economic situation over the next 12 months have increased by one point to -25, which is now 28 points better than this time last year.
Joe Staton, Client Strategy Director GfK, commented: “Against the backdrop of flatlining economic growth, interest rates at a 15-year high, and price rises potentially eroding disposable income for years to come, the Consumer Confidence Index shows a modest improvement this month with gains across all key measures.
“Although the headline figure of -22 means the nation’s confidence is still firmly in negative territory, optimism for our personal finances for the next 12 months shows a notable recovery from the depressed -29 reported this time last year.
“Recovery in this number is important as it best reflects household financial optimism and control over personal budgets. Despite the severe cost-of-living crisis still impacting most households, this slow but persistent movement towards positive territory for the personal finance measure looking ahead is an encouraging sign for the year to come.”
Morning update
Naked Wines has released a half year report showing a marked slowdown in a first half sales and a pre-tax loss nearing £10m.
The online wine group said its total revenues for the six months to 2 October were £132.3m, which represented a drop of 20% at reported currency rates and 18% at constant currency.
Revenues in the period declined in all markets, driven by a 16% reduction in repeat customer sales, in turn driven by a 15% decline in the member base.
Profitability at the adjusted EBIT level declined by £2.4m to £2.2m driven an £11.7m reduction in repeat customer contribution.
The group’s headline pre-tax loss rose to £9.7m from £0.2m as it incurred an a net additional £10.9m of costs recognised as adjusted items, the largest of these being an £11.5m impairment of assets, £10.8m of which is in the US business as a result of the lower than forecast trading in that territory.
The group said its immediate priority is to stabilise the business, starting with customer numbers and then translate that to a stable revenue base.
“If we align the right level of costs and inventory intake behind that we will have a profitable business that generates cash sustainably,” the group stated. “While we have not yet reached that position, we can see signs of this emerging in the first half performance.”
For the full year it expects sales to fall between 12%-16% and adjusted EBIT to be between £2m-£6m from £16.3m last year.
Executive chairman Rowan Gormley commented: “We are moving towards a period of sustained cash generation. We have taken out £3 million of cost with £10 million more to come and expect to generate £40-50 million of cash from inventory over the next 18 months.
“In addition we have made good progress with testing an enhanced customer proposition to restore us to growth. I want to thank our people, our winemakers and our customers for their support and reiterate our determination to make sure that they are rewarded for it.”
On the markets this morning the FTSE 100 is flat at 7,651.4pts.
Risers include Naked Wines, up 7.6% to 46.3p after this morning’s update, DS Smith, up 3.9% to 314.1p and THG, up 2.1% to 88.2p.
Fallers include Cranswick, down 1.3% to 3,884p, Glanbia, down 1.3% to €15.40 and Grencore, down 1.2% to 98.9p.
Yesterday in the City
The FTSE jumped 1.3% to 7,649pts yesterday on expectations that interest rates will be cut in the US in 2024, although the prospects of rate cuts in the UK look more remote.
Strong risers included Ocado, up 11.6% to 718.6p, Just Eat Takeaway.com, up 6% to 1,339p, SSP Group, up 5.4% to 238.4p, THG, up 5.3% to 86.4p, FeverTree, up 3.9% to 1,108p, AG Barr, up 4.5% to 507p, Greencore, up 3.2% to 100.1p and DS Smith, up 2.8% to 302.3p.
The day’s few fallers include Associated British Foods, down 2.1% to 2,390p, Haleon, down 1.7% to 319.4p, Virgin Wines, down 1.3% to 37.5p, McBride, down 1.2% to 86p and Unilever, down 0.9% to 3,763p.
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