Cause for optimism amid positive debt ceiling talks and good news on UK consumers

It would appear we’re heading into the weekend on a slightly more upbeat note, with stock markets posting decent gains, optimism rising over debt ceiling negotiations, and UK consumers feeling a little less downbeat on their prospects.

Still pessimistic but a step in the right direction

UK consumers are pessimistic as ever, albeit slightly less so according to the latest survey from GfK. Sentiment improved slightly to -27 this month, the highest since before Russia invaded Ukraine, but still well below the 0 level that separates optimism from pessimism.

That said, we shouldn’t get too caught up with the negative number. UK consumers are seemingly eternal pessimists, recording negative readings almost every month since 2005 barring a brief period in the middle of 2014 and then again throughout 2015 when the numbers were positive.

While we can’t get too carried away with surveys like this, it is interesting that consumers are less pessimistic given the ongoing cost of living squeeze, double-digit inflation, and high-interest rates. It would appear the resilience in the economy over the past nine months is inspiring some confidence. Whether that will continue as more and more households are hit with higher remortgage rates waits to be seen. But it’s certainly encouraging in the interim.

Bitcoin still looking vulnerable

Bitcoin is managing to hold onto recent gains, having consolidated since falling below $27,000 last week. It had a little wobble on Thursday, falling more than 3% but appears to have regained some composure today. That said, it continues to look a little vulnerable in the short term, with $25,000 the next big test below.

For a look at all of today’s economic events, check out our economic calendar:

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam