Brexit vote pushes confidence down at fastest pace in two decades
One of the most closely-watched barometers of consumer confidence has suffered its sharpest monthly decline in more than two decades as the Brexit shock kicks in and households prepare to tighten the purse strings.
The GfK consumer confidence index sank further into negative territory – scores which indicate more people feel the economy will get worse than better – between June and July, dropping from minus one to minus eight, with big ticket purchases being delayed and more people squirrelling away spare cash for a rainy day.
Only one in five people think the economy will improve over the next 12 months, while 60 per cent expect it to deteriorate – up from 46 per cent last month. Confidence fell most sharply among young people and those living in the north of England, while it held up relatively well in the capital.
Despite the steep fall, the index has been considerably lower in recent years. In every single month between November 2007 and December 2013 confidence was minus 10 or worse, bottoming out at minus 39 in July 2008.
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Meanwhile, Barclays became the latest forecasters to slash their outlook on the economy in a particularly hard-hitting prophecy of how the UK will fare over the next few years. The bank believes unemployment will rise from five to 6.1 per cent by the end of next year, and expects the economy to shrink by 0.4 per cent in 2017.
It said the referendum had raised the prospect of a slowdown across the world due to "non-financial and financial contagion" and said a recession in the United States was "a distinct possibility".