U.K. consumer sentiment likely to have risen marginally

The GfK’s U.K. consumer sentiment is expected to have gained marginally in September. According to a Societe Generale research note, the evidence on consumer sentiment comes from the way that consumers behave rather than what the confidence indices say. The persistent solid retail sales’ momentum is suggesting that the hit to sentiment from the shock referendum result was pretty short-lived, said Societe Generale.

In the previous month, sales dropped mildly by 0.3 percent month-on-month, but only after July were upwardly revised to 2.1 percent sequentially. In July, the GfK sentiment index had dropped to -12 from -1, but it rebounded to -7 in August. It is expected to have come in at -5 in September, noted Societe Generale.

Meanwhile, since the second estimate, the construction output data for August have been released. This has resulted in an upward revision of the second quarter growth in the sector to -0.1 percent sequentially from -0.7 percent. As the construction contributes 6 percent to the total value added, it is not enough for construction sector to cause a revision to the earlier second quarter GDP growth estimate of 0.6 percent. However, it would impart a minor upward risk to the third estimate of the second quarter GDP data. According to Societe Generale, the third estimate GDP data is expected to show that the economic growth remained stable at 0.6 percent.