UK consumer confidence hits highest level since COVID-19

British consumer confidence has risen to its highest level since the coronavirus pandemic started, polling firm YouGov said on Monday. YouGov said its consumer confidence score increased by two points to 105.4, driven by expectations for business activity, house prices and household finances over the next year.

British shares rose on Monday, boosted by gains in bank and energy stocks tracking higher commodity prices, while easing of a stringent lockdown also lifted sentiment.

The blue-chip FTSE 100 index rose 0.6 per cent, with bank stocks, mainly HSBC Holdings, Lloyds Banking group, and Barclays Plc, gaining between 1.8 per cent and 2.9 per cent.

Oil producers BP and Royal Dutch Shell were also among the biggest gainers on the index as crude oil prices surged.

“The inflation the world is seeing is transient cost/push inflation, and is indicative of an accelerating recovery,” said Jeffrey Halley, senior market analyst at Oanda.

“Given the UK’s outstanding vaccination effort vis-a-vis most of the world, and the reasons behind the rise of inflation, I expect UK equities to outperform in 2021, not underperform.”

The FTSE 100 and the mid-cap index have recovered more than 36 per cent and 70 per cent, respectively, from a coronavirus-driven crash last year, as investors bet on a swifter economic rebound, aided by domestic and global fiscal stimulus.

Last week, Britain’s finance minister Rishi Sunak announced support for businesses, while on Saturday, the US Senate passed a $1.9 trillion COVID-19 aid bill.

The reopening of England’s schools to all pupils on Monday will mark the first step back towards normality and is only possible because of the efforts of the public, Prime Minister Boris Johnson said.

The domestically focused mid-cap FTSE 250 index rose 0.8 per cent, with travel stocks, mainly TUI AG, Carnival, Easyjet, and Wizz Air rising between 2.15 and 4.1 per cent.

Senior Plc rose 4.5 per cent, even as the British aircraft parts supplier swung to an annual loss, hit by COVID-19-related disruptions to flight travel and Boeing’s BA.N 737 MAX crisis.

Life insurer Phoenix gained 2.2 per cent, after posting a 48 per cent rise in annual operating profit, helped by its purchase of Swiss Re’s British business ReAssure last year.

Meanwhile the British digital lender Starling Bank said on Monday it has completed a 272 million pounds ($376.39 million) fundraising to fuel lending growth and expansion across Europe.

The bank said the series D funding round was led by Fidelity Management & Research Company, alongside the Qatar Investment Authority, Railpen and Millennium Management.

The round values the company at 1.1 billion pounds pre-money, the company said, with funds raised also going towards a mergers and acquisitions push.

Since launching in 2017, Starling has attracted more than two million customers and lent more than 2 billion pounds.

The lender has fared better in the pandemic than some start-up rivals, including Monzo, with its business banking push accelerated by taking part in state-backed lending schemes.

Anne Boden, founder and CEO of Starling said the fundraising represented a “huge vote of confidence” in the business.

In a trading update, the company said its net income had topped 1.5 million pounds per month, while customer deposits exceeded 5.4 billion pounds.

Shares of banks and automakers lifted European shares on Monday as investors continued to move into economy-linked sectors on hopes of a solid economic rebound from the coronavirus downturn. Automakers and insurers also gained more than 1 per cent, while sectors considered bond-proxies like utilities and personal & household goods were a drag.

Asian markets and Wall Street futures were, however, weaker as the US Senate passage of a $1.9 trillion stimulus bill and a jump in oil prices stoked concerns about inflation, lifting government bond yields in Europe and the United States.

“The reflationary trade is being more supportive of European stocks in general because they’re not as weighted towards growth and tech that the US is,” said Neil Wilson, chief market analyst at Markets.com.

“You’ve got some progress on trade with between Europe and the US and that’s good for some of the companies like Rolls Royce.”

Aero engines-maker Rolls-Royce rose 3 per cent to top gains on UK’s blue-chip FTSE 100. The European Union and the United States agreed on Friday to suspend tariffs imposed on billions of dollars of imports in a 16-year-old dispute over aircraft subsidies.

Meanwhile, England’s schools reopened to all pupils on Monday, marking the first step back towards normality as COVID-19 infection rates fall.