Consumer confidence drops to lowest point for the year

Consumer confidence in the UK sank to its lowest level for the year as economic outlook for the next 12 months was as its its weakest since the Brexit referendum.

According to the long-running GfK Consumer Confidence Index, British consumer sentiment fell to -13 in November from -10 in October, the lowest reading since December 2017 and below economists’ average forecast in a Reuters poll.

GfK said all five measures used to calculate the monthly index decreased, in what is a further indication that the economy is slowing amid growing uncertainty ahead of UK’s exit from the EU in March next year.

The measure that fell the most was the major purchase index, with a seven-point plunge to -3, which could be a bad omen for retailers in the lead-up to the crucial Christmas holiday trading season.

However, expectations for the general economic situation over the next 12 months decreased four points to -32, the lowest it has been since shortly after the Brexit vote in mid-2016.

Meanwhile, the index measuring the forecast for personal finances over the next 12 months decreased one point to 3 this month, one point higher than November 2017, and the savings index stayed at the same level this month at 12, four points higher than this time last year.

“Against a backdrop of the Chancellor telling everyone that the Brexit deal on the table will make people worse off, this month we’re recording an across the board fall for all measures with concerns over household finances, the general economy and purchase intentions,” GfK client strategy director Joe Staton said.

“The measure that fell the most is our Major Purchase Index, with a seven-point plunge that is unhappy news for retailers.

“The view on the general economy in the coming 12 months fell four points, as did the perception of the past year’s personal finances.

“Overall, we are now back at the -13 level we saw at the end of last year. The next few weeks are highly unlikely to inject any festive cheer, especially if Theresa May’s Brexit deal doesn’t win backing from MPs.

“The denouement to more than two years of bewildering Brexit wheeler-dealing looks like it will be enacted precisely when many consumers would prefer to be thinking of a well-earned Christmas break, filled with family get-togethers, warmth and festivity – possibly turning this year’s ‘season of goodwill’ into ‘the season of uncertainty’.”

Parliament is slated to vote on the Brexit deal on December 11.

GfK was forced to publishits Consumer Confidence Index for November earlier than its planned release time of midnight on Friday after it was leaked to the media.

GfK’s index is based on a monthly survey of 2003 Britons that was conducted on behalf of the European Commission and took place between November 1 and November 15.

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