No-deal Brexit could lead to 0.2% decline in Christmas spending

Christmas consumer spending Brexit
Consumer confidence is now at the lowest point in a decade
// Christmas spending is expected to increase by just 0.8% this year due to Brexit uncertainty
// The mere increase is against the 1.2% spike seen last Christmas

New research has shown that Christmas spending is expected to increase by just 0.8 per cent this year due to Brexit uncertainty, while a no-deal could result in a spending decline of 0.2 per cent.

Christmas spending is forecast to increase from £79.72 billion in 2018 to just £80.27 billion this year, according to research carried out by Voucher Codes and the Centre for Retail Research (CRR).

This increase of 0.8 per cent is against the 1.2 per cent spike seen last Christmas, which the study suggests is due to the economic impact of Brexit.

READ MORE: Consumer confidence falls as Brexit uncertainty continues to affect jobs

Consumer confidence is now at the lowest point in a decade, with the report identifying 2009 as the last time shoppers were confident.

“Whilst Christmas is always a busy period for shoppers, it looks as though concerns around Brexit have muted our excitement for this year,” Voucher Codes lifestyle editor Anita Naik said.

“Our research suggests that it is fears over the economic impacts of Brexit, rather than any immediate price changes or product shortages themselves, that are set to hit spending the hardest.

“However, even in the event of a no-deal Brexit, retailers can still expect to see a slight increase in sales this year, but businesses will be hoping for a delay or a form of soft-Brexit if they are to cash in on the Christmas period as much as possible.”

Meanwhile, the Deloitte Consumer Tracker has found that overall consumer confidence has dipped by one percentage point to -9 per cent in the last quarter, down two points year-on-year, due to Brexit uncertainty.

Despite the decrease in consumer confidence, strong disposable income continued to drive leisure spending.

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