News

Brexit has UK consumers feeling as confident as a nervous middle schooler

July 8, 2016

The GfK Consumer Confidence Barometer core index, used to measure post-referendum sentiment following the Brexit news, has declined by a drastic 8 points to -9. This is the first time in 21 years consumer confidence has been so low.  

The survey measured consumers between June 30 and July 5, dividing the core index into Remainers who measured at -13 and Leavers measuring at -5, according to a release.

Additionally, Bank of England Governor Mark Carney stated the central bank might be forced to pump more stimulus into the British economy throughout the summer.

"Our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending. As we've learned from previous periods of uncertainty, consumers turn to well-known brands they love and trust as a guarantee of quality and value for money. Now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs,” said Joe Staton, head of market dynamics at Gfk.

Further, 60 percent of consumers are expecting the economy to worsen over the next year, rising from 46 percent in June. A mere 20 percent of consumers expect improvement, a decrease from 27 percent in June. Total percentage of consumers who expect rapid increase in prices has risen 20 percent.

Regions measured at varying confidence levels, with regions north of England falling 19 points and Scotland falling 11. Younger consumers (age 16-29 year olds) have fallen 13 points, with a more optimistic outlook overall. The largest decrease in confidence, with a drop of 16 points was seen from consumers earning between $33,000 to $65,000 annually. 

"The best thing for business right now is clear and calm leadership and as much clarity as possible on what the post-EU future will look like," said Kevin Green, recruitment and employment confederation chief executive, in the release.