UK-based Growth for Knowledge’s (GfK) consumer confidence indicator jumped from -25 to -21, its best level since January 2021 whereas consensus expected a slight deterioration to -26 in September. UK consumers turned less pessimistic on both the economic situation (-24 from -30) and their personal finances (-2 from -3) in the next 12 months. They also believe that the climate for major purchases has improved (-20 from -24).
Saving intentions were unchanged (27) at the best level since April 2008. GfK added that this month’s improved headline score is good news, but it’s important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough. The financial mood of the nation is still negative.
The Turkish central bank raised its policy rate yesterday as expected by 500 bps, from 25% to 30%. Monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved. Higher-than-expected inflation readings in July and August (59% Y/Y) imply that year-end inflation will be close to the upper bound of the CBRT’s forecasts (>60%) with additional upside inflation risks coming from strong domestic demand, sticky services inflation, higher oil prices and the ongoing deterioration in inflation expectations.
