Consumer sentiment among UK households has fallen to its lowest level since just after the Brexit vote. The rising cost of living and the inconclusive general election have deterred Britons from spending on big-ticket items.
GfK’s consumer confidence index dropped to minus 10 this month, the weakest since the minus 12 recorded in July of last year, the first full survey after the EU referendum, the market-research firm said. Its survey of 2,000 people, carried out before and after the June 8 election, found their attitude toward the economy, and toward their personal finances, had deteriorated. A gauge of their inclination to make major purchases also plunged to the lowest in a year. The findings point to continuing pressure on consumer spending, the engine of the British economy.
The survey “reveals a sharp drop in confidence among consumers across all measures,” said Joe Staton, head of market dynamics at GfK. “The twin pressures of higher prices and sluggish wage growth are squeezing household finances and adding to widespread fears of a Brexit-induced economic slowdown.”
The UK and US will open negotiations over a post-Brexit trade agreement next month, posing an early test of Britain’s ability to strike such deals and of its relationship with US president, Donald Trump. Britain cannot formally sign trade deals with other countries until it leaves the European Union, in March, 2019, but can prepare the groundwork for them to be ratified soon after. Such accords are key to British prime minister, Theresa May’s ability to deliver what she calls the “promise of Brexit.”
The UK exports £37bn more in goods and services to the US than it imports, highlighting the importance of a deal for the British.
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