November 21, 2017

Chart of the Week: Fathom’s UK ESI Remains More Bullish than the Official Data

by Fathom Consulting

The Fathom UK Economic Sentiment Indicator (UK ESI), which distils information from numerous consumer and business surveys, nudged up to 0.6% in October. That improvement was driven by just over half of the surveys included within our ESI, although those more confident in October than in September tended to be business-survey respondents, as opposed to consumers.

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As the chart above highlights, for much of the year there has been a marked deviation between survey-based measures of economic activity (as captured by our ESI) and official data, particularly in the manufacturing and construction sectors. With that deviation in mind, and with consumers still under assault from falling real wages, October’s ESI reading does little to dissuade us that the UK remains vulnerable to a consumer-led downturn. As our clients are aware, contrary to other consultancies, we do not believe that investment- or export-orientated growth will save the day.

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