Brexit causes sharpest fall in UK consumer confidence for 26 years

By

Cajsa Lykke Carlson

Published
Jul 29, 2016

GfK's UK Consumer Confidence Index, which has been running since 1974, saw its sharpest fall since March 1990 in July, when it dropped from -1 to -12, as the result of the EU referendum vote deeply worried consumers.

All five measures that are used to calculate the Index saw decreases in July, and the -12 is a further 3-point drop from the -9 recorded by the Brexit Special in early July. The measure for the General Economic Situation of the country during the last 12 months has dropped 12 points this month to -25; this is 24 points lower than July 2015. Expectations for the General Economic Situation over the next 12 months have decreased a massive 19 points to -33.

The Major Purchase Index is down 11 points to -2, the Savings Index fell four points to +1; and the index measuring changes in personal finances during the last 12 months has decreased by seven points to -1. For personal finances over the next 12 months, the forecast is down by nine points to -1.

Joe Staton, Head of Market Dynamics at GfK, says:
“Consumers in post-Brexit Britain are reporting higher levels of concern this month. We’ve seen a very significant drop in confidence, as is clear from the fall in each of our key measures, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months (-19 points). Although the rate of decline is slower than reported in the aftermath of the vote to leave the EU, consumers in the UK were also less optimistic about the state of their personal financial situation going forward (-9 points). However, the Index continues to remain at a relatively elevated level by historic standards."