Friday in the US saw the Michigan preliminary consumer sentiment index for February which came in significantly worse than expected at 56.2 against the expected 60 (61.2 in January). Wall street ended the session down 1% to 7850.41, while the U.K saw a 37.53 decline to 4270. It is apparent that the U.K business loan scheme is not working as only £12m has been lent in the past month to small companies.
The Pound also lost ground the Japanese Yen admist the ongoing recession in the U.K. Figures overnight showed Japan's economy shrank 3.3%, against -3.1% expected GDP. This is the worst figure in 35 years. Languishing overseas demand dealt a stunning blow to the export-driven economy. A steep drop in exports and falling profits have led companies to reduce both production and work force. That has pushed down consumer spending, further squeezing corporate profitability.
U.K House prices from Rightmove came in at +1.2% for month of February, -9.1% for the year. This is the first rise in 8 months, previous figures were -1.9% in January and +7.3% for the year. However, they are still forecasting a 10% fall during 2009. Furthermore, the average time for selling a property has risen from 93 to 95 days in January.
While the CBI states that the UK is set to fall into a deeper recession that previously thought the FTSE is seen opening down over 1% this morning as Lloyds is seen continuing to affect sentiment and on an otherwise thin day of corporate and economic news today this early nervousness is likely to set the tone for the day, with the US markets closed today for President's day.