UK consumer sentiment continued to sink this month, as households grow more worried about debt levels.A poll of consumer confidence from data firm S&P Global has found that morale continued to drop in February, although not as quickly as in January.The report shows:Consumers signal stronger rise in debt alongside a quicker deterioration in loan availabilityAppetite for major spending recedes to weakest in ten monthsSentiment regarding labour market conditions at lowest since last JuneThis left the S&P Global UK Consumer Sentiment Index (CSI) at 44.8 in February, up from 44.6 in January, but still below the 50-point mark that shows no change compared with the prior month.

Maryam Baluch, economist at S&P Global Market Intelligence, said:“The mood among UK households matches the dismal weather seen so far this year across the country,Although the overall degree of gloom has lifted slightly since January, consumer confidence continues to run at one of the lowest levels seen over the past two years,A period of prolonged rain and a dearth of sunshine have no doubt not helped to lift the low spirits seen among households, but there’s more going on here than just bad weather,Households are growing increasingly worried about debt in particular, especially as a rising need for credit was met with the steepest decline in availability of loans since August 2024,Households’ appetite for major purchases was impacted by the lack of confidence and debt worries, with sentiment around big ticket expenditure slipping to the lowest in ten months.

The low appetite to spend bodes ill for the broader impetus to purchase, hinting at a sustained drag on economic growth from sluggish consumer spending in the first quarter.”Time to wrap up….The mood among UK households about their finances is “dismal”, according to research which suggested consumer spending remains sluggish and debts are mounting.Consumer confidence in the UK is running at its lowest level in two years, a survey by S&P Global found, as households worry about their debts, their future financial prospects, and their savings.S&P said consumers’ pessimism “matches the dismal weather seen so far this year” and said the recent wet weather had “not helped to lift the low spirits seen among households”.

The UK Consumer Sentiment Index survey, which has been running since 2009, posted a reading of 44,8 in February,Any reading above 50 signals a general improvement in consumer confidence, while anything below suggests a deterioration,While this month’s index reading was up slightly from 44,6 in January, it remained among the weakest figures over the past two years.

The S&P report contrasts with recent business surveys, which have suggested a rise in optimism among companies since the start of the new year after uncertainty over the government’s autumn budget lifted.In other newsBad weather in Europe and North Africa is expected to hit supplies of fruit, and could also boost Morocco’s wheat production significantlyJapan and Switzerland have both avoided falling into recession……while Israel’s growth rate picked up last year.The asking average price on UK houses was flat last month,Defence company stocks have rallied, on reports that the UK goverment is considering accelerating its plans to boost spending on the sectorUK government borrowing costs are likely to fall significantly by the end of this year, Goldman Sachs have predicted today, as political uncertainty eases.Goldman analyst George Cole predicted that the yield, or interest rate, on 10-year UK bonds will fall to 4% by the end of this year down from 4.4% today.

Cole points out that UK bond yields have risen this year, coinciding with “with a rise in political uncertainty” (which culminated in Keir Starmer surviving a threat to his leadership last week).With the upcoming Greater Manchester by-election on 26 February and local elections on 7 May, ongoing political uncertainty is likely to keep the “risk premium” on UK bonds elevated, Cole predicts – but it should still ease through the year:Meanwhile, the ongoing decline in macro uncertainty, further disinflation, and the prospects for more BoE rate cuts all tighten the bounds on potential moves in Gilts.While UK risk premium and political uncertainty will likely remain elevated through upcoming local elections, we think the favourable macro backdrop will drive Gilt yields lower.There’s no Wall Street action to excite us today, as the US stock market is closed for Presidents’ Day.In the absense of a nudge from New York, London’s FTSE 100 share index is up 20 points or 0.

2% at 10,465 points.Defence companies continue to lead the risers, following reports that the UK might accelerate its goal of spending 3% of GDP on defence (see earlier post).Daniela Hathorn, senior market analyst at Capital.com, says this could give the British economy a lift:“Economic research shows that higher government defence spending can have a stimulative effect on activity, especially if it goes into capital investment and domestic supply chains, which boosts jobs and income across related industries.The fiscal multiplier for investment is typically positive, meaning that increased defence outlays could add to GDP growth beyond the nominal spending figure.

However, this depends critically on how the spending is financed.If the government funds it through higher borrowing, bond markets could demand higher yields, which might push up government borrowing costs more broadly and weigh on risk assets.However, while defence spending increases can support sectors tied to military equipment and services, they also raise questions about broader fiscal priorities.If accelerated spending leads to cuts in other areas or pressures on public finances, this could dent consumer sentiment and weigh on growth-sensitive assets.UK consumer confidence is already fragile, with households worried about debt and credit conditions.

”A majority of City economists expect the Bank of England to cut interest rates at its next meeting.Reuters has polled 63 economists over the last week, and found that 41 predict the BoE will cut Bank Rate by 25 basis points to 3.50% on March 19.We have a third growth report today – and this one shows that Israel’s economic growth accelerated last year for the first time since the start of the war in Gaza.Israel’s economy grew 3.

1% in 2025, official data showed on Monday, rebounding from a slowdown to just 1% growth in 2024.Growth last year was led by a 7.1% rise in investment and a 5.9% gain in exports, along with a modest uptick in consumer spending.Heavy state expenditure during the two-year Gaza war, particularly on defence, gave an added boost to the economy, Reuters reports.

Israel’s economy grew at an annualised rate of 4.0% in the fourth quarter of 2025, with GDP supported by a 33% jump in exports following the October ceasefire between Israel and Hamas.The Israeli economy grew by 2.1% in 2023 – the year of the October 7 attack – and 1% in 2024.Growth is expected to continue in 2026.

Yonie Fanning, chief strategist at Mizrahi Tefahot Bank, said:“The economy is recovering.The indications for the first quarter of 2026 are also positive - you see that in the trade balance data, etc.So I think it...

sets the basis for continued recovery,”Recent storms have also disrupted UK postal deliveries,Royal Mail has blamed stormy weather and too many workers being off sick after complaints over missed delivery rounds and late letters,The strain on the postal service has meant rounds are missed on a daily basis and letters have been left undelivered for weeks, according to the BBC, which cited reports from more than a dozen Royal Mail postal staff at different delivery offices,Royal Mail said “short-term disruption to certain routes” was due to “adverse weather, including storms Goretti, Ingrid and Chandra in January, alongside higher than usual sick absence”.

Britain’s financial watchdog has fined the former chief executive of construction firm Carillion almost a quarter of a million pounds for his part in misleading statements before the company’s collapse eight years ago.The Financial Conduct Authority has fined Richard Howson £237,700, after finding that he had failed to reveal Carillion’s serious financial troubles in company announcements or alert its board and audit committee.The FCA found that Howson acted recklessly and was knowingly concerned in breaches by Carillion of the Market Abuse Regulation and the Listing Rules.Steve Smart, executive director of enforcement and market oversight at the FCA, said:‘Carillion’s failure was significant.Jobs were lost, public sector projects put at risk and investors, who trusted the company to give them accurate information, suffered large scale losses.

That’s why the FCA worked diligently to hold the company and its senior leaders to account,’Last month, the FCA fined two former Carillion finance directors – Richard Adam and Zafar Khan – for misleading investors before Carillion entered liquidation with £7bn of debts in January 2018, resulting in 3,000 job losses,The wet weather which has been hitting Europe and northern Africa in recent weeks is hurting fruit production, but is good news for wheat farmers,In Morocco, grain traders are expecting the cereals harvest to double this season after abundant winter rains,Omar Yacoubi, head of Morocco’s wheat trading federation FNCL, told Reuters:“We expect a good cereals harvest this year of 8 to 9 million tons, including around 5 million tons of soft wheat.

”The previous harvest was 4.4 million tons, including 2.4 million tons of soft wheat.But heavy rain, and floods, have badly damaged fruit farmers in Morocco and Spain, as journalist Harry Wallop shows here on X:🍓🫐 Noticed a shortage of raspberries, strawberries & blueberries on the supermarket shelf? You could soon.🇪🇸 🇲🇦 Devastating storms in Spain & Morocco – where we get most of our winter berries – have destroyed polytunnels, flooded farms.

150,000 have been evacuated in 🇲🇦 🧵1/3 pic.twitter.com/6ZFpyh78Vg🇲🇦 Begnat Robichaud, at iBerry, which supplies most UK supermarkets from Morocco: "It's an absolute disaster for the area and for our industry.We can't even access our packhouse because the village in which it is in is so badly flooded." 🧵2/3 pic.

twitter.com/9o8UWVupmOFood supply company Fresh Direct has warned that the availability of ‘multiple products’ will be affected for “some time due to delayed plantings and weatherrelated quality issues”.Fresh Direct explains:Poor weather continues across several key European growing regions, with storms and heavy rainfall disrupting both harvest and transport.This affects quality, availability and logistics, with ferry routes struggling to recover from delays.Britain’s auditors regulator is considering allowing firms from China listing in London to apply Chinese Standards on Auditing for UK listing purposes.

It’s all part of the government’s push to boost UK economic growth and increase the competitiveness of London’s financial markets.The Financial Reporting Council (FRC) says it is consulting on an amendment to its Third Country Auditor (TCA) policy, to temporarily permit auditors of Chinese-registered entities listing Global Depositary Receipts (GDRs) in London to use Chinese Standards on Auditing (CSAs) for UK listing purposes.GDRs represent shares in a foreign company which are traded on a local stock exchange, allowing investors to get access to the stock without a full-blown primary stock market listing.The eurozone’s factory sector ended 2025 with its biggest monthly fall in activity since last April.Eurozone industrial production fell by 1.

4% month-on-month in December, statistics body eurostat reports, led by a decline in capital goods (physical assets such as tools and machinery).The survey found that industrial production:decreased for intermediate goods by 0.1%,decreased for energy by 0.3%,decreased for capital goods by 1.9%,increased for durable consumer goods by 0.

2%,decreased for non-durable consumer goods by 0.3%.UK households are also pessimisic about their spending plans.S&P Global reports:All 12 UK regions and nations recorded reductions in both cash availability and savings.The steepest falls in cash availability were seen in the East Midlands and Northern Ireland, with the former also recording the quickest decline in savings, followed closely by Yorkshire & Humber.

UK consumers’ sentiment about debt has hit its lowest level in 23 months, today’s report shows.S&P Global explains:UK households indicated a further increase in debt in February, with the rate of accumulation the strongest recorded since last July.Debt levels rose across all age groups except those aged 25–34, where debt stabilised, with the steepest rate of increase among 18–24 year olds.Households also expressed a stronger need for unsecured credit in the latest survey period, but the accessibility of loans continued to deteriorate.Notably, households signalled that the availability of unsecured credit declined at the steepest pace in a year-and-a-half.

S&P Global also report that households across all 12 UK regions and nations registered a decline in their current financial health this month.The steepest reduction was recorded in the East Midlands, while the softest was in London.Today’s consumer sentiment report explains:Although sentiment around current finances was less downbeat, households were slightly more pessimistic regarding their financial prospects for the coming next 12 months.The respective seasonally adjusted index dipped to a two-month low, with only households in London, the West Midlands and the North West forecasting an improvement in their financial health over the next year.