FirstFT: UK consumer confidence falls to record low

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UK consumer confidence has dropped to its lowest level for nearly 50 years amid the cost of living crisis, according to a survey, fuelling concerns that the economy will slide into recession in 2022.

The UK consumer confidence index fell 2 percentage points to minus 40 in May, its lowest level since records began in 1974, said research company GfK.

The survey measures how people view the state of their personal finances and wider economic prospects. Joe Staton, client strategy director at GfK, said: “Consumer confidence is now weaker than in the darkest days of the global banking crisis, the impact of Brexit on the economy, or the Covid shutdown.”

The fall in confidence reflected soaring inflation, which reached a 40-year high of 9 per cent in April driven by rising energy prices following Russia’s invasion of Ukraine. Linda Ellett, UK head of consumer markets at KPMG, said that “as prices and rates rise, the ability of consumers to spend is falling”.

Thanks for reading FirstFT Europe/Africa. Here’s the rest of today’s news — George

The latest on the war in Ukraine

• US aid: The US Senate approved $40bn in military, economic and humanitarian assistance for Ukraine. Joe Biden is expected to quickly sign the measure.

• Inflation: For many Europeans, the nearer to Russia, the faster costs of living are rising. Here’s a look at how prices are increasing at different rates across the continent, with costs rising the fastest in the Baltics and eastern Europe.

• Nato: Sweden’s Magdalena Andersson has led her country to the brink of Nato membership after centuries of neutrality, but the bid has run into trouble over Stockholm’s role in the dispute between Turkey and Kurdish militants.

• Companies: Google Russia plans to file for bankruptcy, McDonald’s has agreed to sell its Russian business to a Siberian entrepreneur and Hungary’s biggest energy company is preparing its refineries to process non-Russian oil.

Five more stories in the news

1. UK’s Hinkley Point C costs set to soar by £3bn, warns EDF France’s EDF has said the costs of the Hinkley Point C nuclear power plant under construction in the south-west of England could balloon by an additional £3bn and warned of further delays because of supply chain problems arising from Covid-19 lockdowns.

2. THG rejects £2bn bid as Candy considers offer UK online nutrition and beauty products seller THG has rejected a £2.07bn bid from two investment companies, as a venture capital firm controlled by property tycoon Nick Candy said it was also exploring an offer. THG has been hit by a string of setbacks since its 2020 IPO.

3. Odey urges Shell to drop emissions appeal Odey Asset Management has called on Shell to drop its appeal against a Dutch court ruling targeting its climate strategy and instead fund an independent body to audit the emissions of every oil and gas company. Europe’s biggest oil company is preparing to face a shareholder vote next week on its transition strategy.

4. Luna collapse highlights role of crypto exchanges The $40bn implosion last week of popular crypto token Luna underscored the crucial role exchanges play as gatekeepers on which digital assets are accessible to mainstream traders — such as so-called stablecoin TerraUSD, which became nearly worthless.

5. Sexual misconduct case rocks $47bn asset manager GoldenTree Sexual misconduct allegations at a prominent New York hedge fund have ignited a multimillion-dollar legal dispute over the dismissal in 2020 of then chief operating officer William Christian following an internal investigation that detailed a litany of misconduct.

The days ahead

Economic data EU flash consumer confidence data is out, after falling to a two-year low in April, when fewer people said they intended to make big purchases.

Biden in Asia The US president begins his first trip to Asia in the role. He will meet the new president of South Korea, Yoon Suk-yeol, today, before heading to Japan on Sunday.

Corporate earnings Deere & Company, Nationwide and Richemont report earnings.

Council of Europe Foreign ministers from the group’s 46 member states meet today in Turin to discuss their response to Russia’s invasion of Ukraine.

Australian election Australians vote tomorrow in a federal election, in which the Liberal-National coalition government led by Prime Minister Scott Morrison faces a challenge by the Labor party.

What else we’re reading

New investor gives Vodafone ‘breathing space’ After a tumultuous few weeks, Vodafone has been granted some relief as the state-controlled Emirates Telecommunications Group acquired a 9.8 per cent stake for about $4.4bn — and voiced unreserved support for the European telecoms company’s management and strategy.

UK is in a semiconductor mess of its own making Business secretary Kwasi Kwarteng has until the end of June to use new national security powers to reverse a Welsh chip fab’s purchase by a Dutch subsidiary of China’s Wingtech. The issue, Helen Thomas writes, underscores the UK’s battle over national security and strategic economic interests.

The truckers who keep our world moving The history of humanity — from Bronze Age trade in the Indus valley to lorries carrying aid to Ukrainian refugee children — is the story of supply chains. Horatio Clare hitches a long-distance lift with a truck to see the world from a startling new angle.

A Warhol, a wild back-story and today’s art market The Andy Warhol silkscreen “Shot Sage Blue Marilyn” — which sold for a record-setting $195mn at a New York auction — deserves the cliché “iconic”, but Tim Harford argues there is a much more obscure portrait that has a claim to being Warhol’s most interesting and definitive work.

Death notices for the city are premature It’s not just the cost or duration of travel that is preventing urban dwellers from spending five days a week in the office, John Burn-Murdoch writes. It’s that standing nose-to-armpit on a packed commuter train is not fun, but sitting on an airy train to a pub full of friends is.

Gaming

Being a real-life city planner sounds both complex and stressful. So why is it so much fun in game form? Balancing resources and attending to citizens’ diverse needs can be a satisfying puzzle. In recent years, city-building games have become more complex and environmentally minded.