Buoyant Footsie defies the gloom with FTSE 100 up nearly 5% this month

A week on from Bank of England Governor Andrew Bailey’s pessimistic forecasts for the UK economy – and markets are up while consumer sentiment is improving.

At the Bank’s quarterly economic review last week Bailey predicted a protracted recession with no growth for close to two years, a contraction in GDP of more than 2 per cent and mushrooming unemployment.

But the FTSE 100 is up by just under 5 per cent this month on the back of strong financial results in hospitality, financial services, housing and media industries among others, and two surveys this week show that consumers have kept spending.

British Retail Consortium figures showed a 2.3 per cent rise in retail sales in July, while polling firm data found that consumer confidence rose for the first time in seven months in July. 

Housing prices are also holding up, with Nationwide saying they climbed at an annual pace of 11 per cent in July.