Consumer confidence falls to three year low
Consumer confidence has dropped to its lowest level since July 2013, with the Brexit vote raising shoppers’ fears about incomes and house prices, but previous income rises could offer support.
The YouGov/CEBR Consumer Confidence report found that its consumer confidence index fell by 4.7 points to 106.6 in July.
‘The Brexit vote has had a very real impact on consumers and the effects of this could start to be felt in the real economy in the next couple of months. The sharp drop in household financial expectations over the next 12 months point to a contraction of consumer spending that could have a notable knock-on effect in retail spending,’ says Scott Corfe, CEBR director.
CEBR has forecast that house prices will continues to rise, but growth will be slower.
'Whilst the latest data shows a slight slowing in spending power growth, we continue to see a picture of broad increases in discretionary incomes across the country. In the uncertain economic environment the UK now faces, the gains in spending power seen in recent years cannot be understated. Whilst consumers have understandably lost some confidence in recent weeks, improved finances should provide some support in navigating the uncertain outlook,’ adds Sam Alderson, CEBR economist.
Asda’s monthly Income Tracker shows households' discretionary income rose to £201 a week last month, although the rate of growth slowed slightly thanks to higher inflation and transport costs.