Brexit starting to squeeze UK economy even tighter

The Brexit squeeze on British consumers has hurt the UK government’s finances as well as retailers, new figures show, indicating that the economic slowdown at the start of the year is now being felt more broadly.

A stalling of sales tax revenues, a barometer of the economy, helped to widen the UK’s budget deficit by more than expected, official data showed. A separate survey showed business confidence among retailers declined at the fastest pace since 2012, around the last time the UK flirted with recession. The UK economy was barely ruffled last year by June’s shock vote to leave the EU. However, a steady rise in inflation since the referendum, combined with weak wage growth, has slowed its momentum this year.

Official figures due tomorrow are expected to confirm that the pace of growth more than halved in the first three months of 2017, a contrast with strong growth in the eurozone so far this year.