Stocks mixed as UK consumer confidence sinks to fresh low

February 20, 2025

4 minutes read

The FTSE 100 (^FTSE) lagged behind its European peers on Thursday as UK consumer confidence sank to a new low amid concerns about finances and the state of the economy.

According to the British Retail Consortium (BRC) and Opinium, the public’s expectations for the economy worsened for a fifth month running in February, having fallen almost 40 points since July last year.

Households are also more pessimistic about their own personal finances as they anticipate further price rises in the shops, as retailers pass on higher taxes.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Even Gen Z (18-27), the most upbeat generation on the economy and their own finances, saw a drop off in optimism. There was also a widening gender divide in confidence this month, with women more pessimistic than men about both the economy and their own finances by 13 and 17pts respectively.

“With many businesses warning of the impact that April’s employer NIC’s increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried. And while there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future.”

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London’s benchmark index (^FTSE) was 0.3% lower in early trade.
Germany’s DAX (^GDAXI) rose 0.3% and the CAC (^FCHI) in Paris headed 0.5% into the green.
The pan-European STOXX 600 (^STOXX) was up 0.1%.
Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
The pound was 0.2% up against the US dollar (GBPUSD=X) at 1.2610.

FTSE Index – Delayed Quote USD

As of 9:46:10 GMT. Market open.

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Mercedes to cut production costs

Mercedes-Benz has announced plans to cut production costs amid a sharp slowdown in electric vehicle sales.

The German car firm plans to reduce costs by 10% by 2027 as it seeks to “ensure the company’s future competitiveness”, after EV sales nosedived 23% last year and deals in China fell 7%.

Profits dropped 28% to €10.4bn (£8.6bn) last year, while revenues also slid about 4% to €145.6bn.

Mercedes warned that its earnings before interest, taxes and other charges would be “significantly below” the €13.6bn EBITDA achieved in 2024, which was down 30% on the previous year.

But Ola Kallenius, chief executive, said:
UK consumer confidence sinks to fresh low

UK consumer confidence sank to a new low this month amid concerns about finances and the state of the economy.

According to the British Retail Consortium (BRC) and Opinium, the public’s expectations for the economy worsened for a fifth month running in February, having fallen almost 40 points since July last year.

Households are also more pessimistic about their own personal finances as they anticipate further price rises in the shops, as retailers pass on higher taxes.

Helen Dickinson, chief executive of the British Retail Consortium, said:
Lloyds profits plunge 20%

Lloyds (LLOY.L) has reported a significant 20.4% drop in its annual profit, falling short of market forecasts, as the bank set aside additional funds for potential motor finance payouts.

The UK’s largest mortgage lender revealed a pretax profit of £5.97bn ($7.5bn) for the year 2024, down from £7.5bn in 2023. Analysts had predicted a slightly higher profit of £6.39bn, according to a consensus compiled by Reuters.

The bank attributed the decline to the impact of interest rate cuts on lending margins and the ongoing sluggishness in Britain’s economic recovery.

Net interest margin — the difference between savings and loan rates — fell 16 basis points to 2.95%.

Underlying net interest income fell 7% to £12.8bn amid falling interest rates. Pre-tax profit also tumbled in the fourth quarter to £824m, a 55% drop from the £1.8bn achieved in the previous quarter.

Despite the overall downturn, the bank’s net income for the fourth quarter of fiscal 2024 rose by 3.4%, reaching £4.37bn compared to the same quarter in the previous year.

However, underlying profit for the quarter plummeted by 43.1% year-on-year to £993m, while earnings per share stood at just 1 pence, a 41.2% decline compared to the same period in 2023.

Read more on Yahoo Finance UK
Asia and US overnight

Asian shares traded mostly lower after a quiet day on Wall Street, with the Nikkei (^N225) down 1.2% on the day in Japan, while the Hang Seng (^HSI) fell 1.6% in Hong Kong.

The Shanghai Composite (000001.SS) was flat end of the session after China left its benchmark interest rate unchanged, in a move it said was meant to maintain financial stability.

Across the pond on Wall Street, the benchmark S&P 500 (^GSPC) rose 0.2% to 6,144.15, adding to its record high. The Dow Jones (^DJI) climbed 0.2% to 44,627.59 and the tech-heavy Nasdaq Composite (^IXIC) advanced 0.1% to 20,056.25.

It came amid concerns about Donald Trump’s tariff policies which continued to weigh on investors’ minds.

In the bond market, the yield on key 10-year US Treasury notes fell to 4.538% from 4.551% late on Tuesday.
Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and all that’s happening across the global economy.

Here’s a quick look at what’s on the agenda for today:

7am: Trading updates: Lloyds, Anglo American, Centrica, Mondi, Hays, Safestore

11am: CBI industrial trends report

1.30pm: US initial jobless claims data

3pm: Eurozone consumer confidence report for February