The market’s mood has been darkening in recent times. China’s tightening of its lockdown is causing concern that this will worsen the critical shortages the world is facing. Memories of the disruption caused by the first lockdowns have not yet faded, and that worry comes on top of a medley of disappointing data elsewhere.
The UK economy recorded growth of just 0.1 per cent in February, which was lower than expected (January’s growth rate was 0.8 per cent). Businesses are feeling gloomy: the most recent CBI survey has revealed falling optimism among its members at -34 per cent (down from -9 per cent in January), and new orders rising at a slower pace in the three months to April compared with January (22 per cent from 38 per cent). Firms expect the pace to slow even further in the next three months to around 6 per cent. And costs are growing at the fastest rate since July 1975.
Meanwhile, GFK’s consumer confidence survey revealed that consumer confidence is nosediving too. Retail sales fell by 1.4 per cent in March, as falling household real income encourages people to rein in their spending.