Consumer confidence slumps to lowest level in a year due to Brexit

03-12-2018

Consumer confidence has slumped to its lowest level in a year amid the ongoing uncertainty surrounding Brexit, according to new data.

Analysis by YouGov and the Centre for Economics and Business Research looked at confidence across a range of measures, including household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months.

Seven of the eight measures declined in November while only one improved, and researchers noted that some measures showed marked falls, for example job security, which over the past 30 days fell by its largest amount since March, while over the coming 12 months recorded its largest fall since May.

Nina Skero, Head of Macroeconomics at the Centre for Economics and Business Research: “Although there is now a proposed Brexit deal on the table, the level of uncertainty is by no means subsiding. Questions over the likelihood of the UK Parliament backing the deal and the nature of the long term UK-EU relationship loom large.

“With this in mind, it’s little surprise that consumer confidence has dipped across all but one measure, bringing the headline figure to the lowest level in a year.” Analysts warned this week that uncertainty around the Brexit deal would lead to continued volatility in the pound.

Meanwhile, the Bank of England said a “disorderly” no-deal Brexit next March could plunge the UK economy into a larger recession than the global financial crisis a decade ago.

In a “worst case” scenario modelled by the Bank, the UK’s economy would contract by 8 per cent, house prices would fall by a third, unemployment would spike top 7.5 per cent, interest rates would shoot up to 5.5 per cent and the value of the pound would fall to below one dollar.

Such a fall in GDP would be deeper than the 6.25 per cent plunge in UK GDP output seen in 2008/09, which was itself the most severe drop since the 1920s.

Source: The Independent