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UK Weekly Commentary - 26 May 2020

UK weekly commentary from Awa Brokers covering week highlights, what we’re thinking about the markets and what your clients may be asking this week.


What we think

Dr Dayo Abinusawa MBA, PhD (Cantab), Head of Strategy and Research on what this report says about the economy.

Consumer confidence has weakened against the threat of a slowdown in the UK economy due to the spread of Covid-19. Economic activity is expected to contract in the near term due to measures adopted to suppress the spread of the virus. It’s no surprise that 96% of retailers have reported cashflow difficulties, with 40% facing difficulties meeting tax liabilities. Also, 44% of retailers reported furloughing staff, while 8% reported permanent staff layoffs.

Week ahead

Confederation of British Industry (CBI) Distributive Trades Survey (May) – UK high street trade sales balance dropped to -55 in April 2020, and is expected to reach -50 in May. The survey paints a picture of subdued activity for retailers as the Covid-19 outbreak has had a significant negative impact on sales.

UK GfK (Gesellschaft für Konsumforschung) Consumer Confidence Index (May) - Consumer Confidence Index is expected to drop two points to –35. Overall, there is no guarantee yet that the fall in consumer confidence has ended, and we are only four points away from the record -39 low seen in July 2008.

Nationwide house price mm (May) – Monthly house prices are expected to decline to -1% from 0.7% in April. There has been a month on month gains for the last seven months in a row, after taking account of seasonal effects.

Nationwide house price yy (May) – Annual house prices expected to decline to 2.8% in May, down from 3.7% in April. Annual house price growth increased to 3.7% in April, up from 3% in March - the fastest pace since February 2017.


*For professional clients and qualified investors only

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