UBS On-Air: Paul Donovan Daily Audio 'Sense or sentimentality?'

Paul Donovan· Host0:01

Good morning. This is Paul Donovan, Chief Economist at UBS Global Wealth Management. It's seven o'clock in the morning London time on Friday the twenty-second of May. The economic data calendar has more sentiment surveys than is good for it. The UK's GfK consumer sentiment data for May showed an improvement against expectations for a decline. This would be a reason for optimism were it not for the rather inconvenient fact that since the global financial crisis, UK consumer sentiment data has had only the most distant of relationships with economic reality. April retail sales, which is a volume, not a value measure, so does not include oil price increases, was somewhat weaker than had been expected. But the reported pattern of consumption was what was interesting. Auto fuel sales were an especial area of weakness. They were down more than ten percent compared to March and are suggesting that consumers responded to the war by driving less. Working from home is quite common in the UK, and as well as being more economically productive, this obviously reduces fuel demand. What is politely termed variable weather weighed on clothing sales. The German Ifo business sentiment poll is next on the agenda. Business sentiment on this measure has fallen