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Gloomy consumers see confidence at lowest level since Brexit vote

Confidence among British consumers fell sharply to its lowest level since the aftermath of the Brexi..

By admin , in Money , at November 24, 2017

Confidence among British consumers fell sharply to its lowest level since the aftermath of the Brexit vote in November amid a worsening outlook for household finances and nerves around the housing market after interest rates rose.

The consumer confidence measure published today by Yougov and the Centre for Economics and Business Research (CEBR) will show the index reaching the same level as the July 2016 reading.

Optimism had increased steadily from June of this year to hit a level of 109.3 points on the index last month, but it fell back to 106.6 in November.

Read more: Consumer confidence edges back down as economic jitters continue

While the overall index is still well above the 100 measure indicating more confidence than negativity, negative outlooks on household finances and job security have made consumers wary.

Prices have risen well ahead of wages over the last two years, owing to the devaluation of sterling after the Brexit vote – the main economic effect of the decision to leave the EU so far. The real wage fall has led to pinched finances for households, although consumption has held up well, sustaining the British economy.

Christian Jaccarini, an economist at CEBR, said: “November saw consumer confidence damaged by a range of factors. The first interest rate hike in over a decade triggered fears that higher borrowing costs will compound the inflation-induced squeeze on household incomes."

The Bank of England's interest rate hike at the start of November has also thrown renewed focus on the prospects for house prices, with fears from homeowners that marginally more expensive borrowing could dampen demand and consequently lower their house prices.

The index score for house values over the past month fell to its lowest level since July 2013, while home owners’ expectations for house values over the next 12 months are the weakest since July 2016.

Read more: Bank of England raises interest rates for the first time in a decade

Original Article


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