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UK Consumer Confidence, US Growth and Finish Elections in Focus

Consumer confidence beats expectations in the UK, this weekends presidential election in Finland, expanding US economy, and weakening consumer confidence in Germany.

UK Consumer Confidence Rises to Highest in Two Years

GfK consumer confidence beat expectations this morning, coming in at -19 points against projections of a -21pt print. This marks an uptick from December’s figure which came in at -22, and is indicative of how household confidence may be restoring as people look towards the prospect of rate cuts later this year and consider January’s cut to national insurance.

This morning’s print was also the third consecutive month of improving consumer confidence as the indicator rose to its highest level since January 2022.

The personal financial situation indicator also rose from last month’s print, ending two years of consecutive monthly declines. As one director at GfK stated, “this significant change is the best single indicator for how the nation’s households feel about their income and expenditure”, thus giving room for some cautious optimism.

Finnish Election

This weekend will see the Finnish electorate head to the polls in the country’s latest presidential election. Here, they will decide which one of the nine candidates will serve the next six-year presidential term as the incumbent Sauli Niinisto prepares to leave after twelve years in office.

While there is little difference between the two frontrunners as far as the opinions polls are concerned, there is a considerable difference between their manifesto pledges with both standing at opposite ends of the political spectrum.

Slightly ahead of the latest opinion poll is the right-wing candidate Alex Stubb who served as Prime Minister of Finland from 2014 to 2015. Stubbs is running as the National Coalition Party and is broadly considered pro-european. Three points behind Stubb in the polls is the left leaning Pekka Haavisto, a politician who has failed to win the presidential race twice already but is hopeful of a victory for the Green party.

The elections come against a backdrop of rising tensions with their neighbour, Russia, and just months after Finland’s accession to Nato. The Finish economy is also facing headwinds having seen a contraction of 0.9% in Q3 2023 as its economy suffered the steepest decline in growth since the start of the pandemic.

While the election is held on Sunday, there will be a run-off if no candidate manages to secure 50% of the vote.

US GDP Surpasses Expectations

Yesterday’s US GDP print indicated that the worlds largest economy expanded as much as 3.3% on an annualised basis in the last three months of the year. This came considerably higher than the market consensus of 2% with food, accommodation, and health care services seeing sizeable growth. The growth of the US export market also helped lift up the wider economy, as they grew 6.3% on an annualised basis. The latest figures also suggest that US economic output grew 2.5% over 2023, marking a considerable uptick from the 1.9% figure of in 2022.

German Consumer Confidence Downbeat

On the continent, German consumer confidence showed signs of weakening further this morning, slipping to -29.7 point from last month’s -25.4 point print as it sunk to its lowest level in just under a year. The report noted how income expectations continued on their downward trend as the propensity to buy fell in the wake of declining income prospects.