Confidence rebound 'might soften downturn this year'
Joe Staton, client strategy director at GfK, said the unexpected rebound in consumer confidence "might be what we need to soften any downturn in 2023". He said:
Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year.
While it's too early to talk about 'green shoots of recovery', the uptick across all measures should be welcomed.
The headline consumer confidence score is still severely depressed and the mood as well as the economy remains a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.
Good morning
Household confidence in Britain bounced back by the most in nearly two years in February amid the first signs that inflation is beginning to ease.
GfK's consumer confidence indicator jumped seven points to a minus 38 after inflation fell for a third straight month to 10.1pc in January.
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What happened overnight
Asian share markets were dragged lower by the slide in Chinese stocks, though investors took heart from the incoming head of Japan's central bank ruling out an early end to super-easy monetary policy, nudging bond yields lower globally.
During a lower house confirmation hearing, Kazuo Ueda, who will take over as governor of the Bank of Japan (BOJ) in April, said the central bank must maintain ultra-low interest rates to support the fragile economy, warning of the dangers of responding to cost-driven inflation with monetary tightening.
Japan's five-year government bond yield fell to 0.235pc, from the previous close of 0.240pc, while the 20-year yields eased two basis points to to 1.28pc.
Tokyo stocks closed higher after the comments. The benchmark Nikkei 225 index gained 1.3pc, to end at 27,453.48, while the broader Topix index climbed 0.7pc to 1,988.40.
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8pc, heading for a hefty weekly drop of 2pc.
In particular, Chinese blue chips tumbled 1pc and Hong Kong's Hang Seng Index dropped 1.3pc while Australia's resources-rich shares edged up 0.3pc.
US stocks shook off a midday slump and ended higher after a rollercoaster session.
The S&P 500 climbed back above 4,000, after finishing 0.5pc higher at 4,012.32 - ending its four-day slide. The Dow Jones Industrial Average reversed its losing streak too, finishing 0.3pc higher at 33,153.91.
The tech-rich Nasdaq Composite also grew 0.7pc to 11,590.40, lifted by tech stocks Microsoft, Apple and particularly AI chipmaker Nvidia which posted better-than-expected revenue forecasts.
The yield on 10-year Treasuries declined four basis points to 3.87pc on Thursday, as revised data showed that US economic growth in the fourth quarter was weaker than initially estimated.