Investors digest latest rate hikes

A monthly consumer confidence survey from GfK showed U.K. households became more optimistic in February, with improvements in five measures that it records, including views of future financial situations, the ability to fund major purchases and the broader economic picture.

“The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023,” Joe Staton, client strategy director at GfK, said in the release.

The slight recovery benefited retailers in February, said Gabriella Dickens, senior U.K. economist at Pantheon Macroeconomics, in a note.

U.K. retail sales rose by 1.2% on the month in February, according to national figures also published Friday. The print came in above a consensus expectation of 0.2% and surpassed the 0.9% rise of January.

February retail sales were nevertheless down 3.5% year-on-year. The figure for the three months leading to February was also down 0.3% on the previous three months.

The outlook for retail is mixed, Dickens said, with households avoiding a 1% hit to disposable income because of the ongoing government-funded energy bill cap and suspension of an increase in fuel taxes, as well as rises in the state pension and living wage.

But they will still be affected by other tax measures and by the withdrawal of the energy bill grant program. Figures from the Insolvency Service show an uptick in redundancies in the coming months, while higher mortgage rates will begin to squeeze, Dickens added.

— Jenni Reid

European stock markets were on track to open lower on Friday, according to data from ig.com.

The FTSE 100 was down 49 points to 7,451. France’s CAC 40 was down 48 points to 7,086, Germany’s DAX down 72 points to 15,137, and Italy’s MIB down 155 points to 25,792.

— Jenni Reid