Consumer confidence still lower than before Brexit

John Hewitt Jones

September 28, 2016

Consumer confidence is still lower than before the Brexit vote as growth slowed in August, the YouGov/Centre for Economics and Business Research (CEBR) consumer confidence index shows.

The index stands at 111.1; an increase of 1.0 points on figures for august – more than two points below the pre-Brexit score. In May, the last full-month figure before the referendum, it was 113.6.

September’s improvement in consumer confidence has been tempered by fears over job security and household finances, according to the research. Figures for job security over the next 12 months are at their lowest level since February.

House values and business activity over the last 30 days have improved while people’s expectations for their household finances and house values in the year ahead have also strengthened notably.

Scott Corfe, director at the Centre for Economics and Business Research, said: “Though the economy is showing few – if any – signs of a Brexit-induced slowdown, consumers have not quite regained their pre-referendum confidence. It may be that this changes over the coming weeks if economic data remain fairly solid.

“However, there are fears about the longer-term impact of the vote. Although consumers are showing good signs of regaining their confidence in a number of areas over the past couple of months, there are on-going workplace fears for the year ahead. While these exist they will act as a handbrake on the post-referendum recovery in consumer confidence.”

Stephen Harmston, head of YouGov added: “After the surge in consumer confidence in the past couple of months, this month’s figures tell us where we are now and also hint at what’s on the horizon.

“Confidence was dented by the panic that gripped the country in the days following the referendum but since then all the data points to a steadying of the ship. From consumers’ perspectives very little has materially changed since the vote to leave the EU.

“However, there is a duality in their mind set – at the moment things are ok but there could be a slowdown in the year ahead.

“The business activity and job security figures for the coming 12 months imply that consumers are starting to factor in Article 50 being triggered in the next year. This suggests that the referendum’s impact on the economy has been deferred for the time being rather than averted entirely.”

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