Matt Britzman, senior equity analyst at Hargreaves Lansdown, discusses how UK markets edged higher despite mixed signals from retail sales and consumer confidence, while Wall Street set fresh record highs and oil prices fell for a third straight session.
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“UK markets opened a touch higher this morning, but the calm masks a tug-of-war in the data. UK shoppers delivered another surprise in August, with retail sales up 0.5% for the second month running, outpacing forecasts as sunny weather drove demand for clothes and food treats. But while tills were busy, the mood is anything but buoyant, with consumer confidence slipping to its lowest in three months, as looming tax hikes cast a long shadow. The disconnect is clear, with consumers happy to spend now, perhaps before the Chancellor comes calling in November, but sentiment on the economic outlook remains firmly in the red.
Even August’s Bank of England rate cut hasn’t shifted the dial, suggesting cost pressures and fiscal fears are doing the heavy lifting on household anxiety. For investors, this mix of resilient spending and fragile confidence paints a tricky picture. Retailers may enjoy a short-term boost, but the longer-term story hinges on whether sentiment catches up or spending cracks.
Wall Street was in full celebration mode yesterday as all three major indices closed at record highs, with investors choosing to see the glass half full. The Fed’s pivot toward rate cuts, even against a backdrop of sticky inflation, has markets betting on a softer landing rather than a policy misstep. A strong earnings season, free of major shocks, has only added fuel to the rally, leaving little on the near-term horizon to spoil the mood. Today’s scheduled call between Trump and Xi is the most obvious near-term catalyst, which could shape not just the fate of TikTok but the tone of broader trade talks.
Oil slipped in early trading with Brent crude at around $67 a barrel, marking its third straight decline as markets digested a cocktail of headlines. President Trump’s call for ‘cheaper oil’ cooled supply fears, even as Ukrainian strikes on Russian infrastructure kept geopolitics simmering. Add in a Fed rate cut, meant to fuel growth but hinting at economic jitters, and you’ve got an oil market caught trying to balance growth hopes against demand concerns.”
