Northern consumers unfazed by Brexit, says Deloitte

Consumer confidence in the North of England has seen the highest increase since the tracker series began at business advisory firm Deloitte, even in the face of the uncertainty surrounding the Brexit vote.

In the capital, however, the opposite has occurred with the index dropping nine points lower than the previous period, according to Deloitte’s survey.

"The Brexit vote may be weighing on a region in which 60 percent of the population voted to remain (in the EU) and where reliance on financial services, migration and capital flows are especially strong," chief economist at Deloitte Ian Stewart told Reuters.

Nation-wide the index has however seen the largest increase in 18 months by three percentage points. In the third quarter the index was bumped up to -5, a five year high and its largest increase quarter on quarter.

Five out of the six measures increased between the second and third quarter, which suggests Brexit has not impacted consumer confidence, according to Deloitte.

The firm attribute this stability to low inflation in the third quarter. On the contrary, Reuters said economists taking party in its poll expect official data on Thursday to show retail sales growth to slowdown in September due to price rises affecting purchasing power.

Expenditure on essentials fell flat again as consumers moved towards discretionary categories. Trends also showed consumers favouring leisure goods such as holidays and experiences over consumer goods.

The job security measure also rose six percentage points in contrast to the three consecutive falls in previous quarters, indicating strong gains in job opportunities and career progression.

However with Prime Minister Theresa May signalling she will pursue controls over migration, employers worry this could reduce Britain's future access to the EU's single market.

Looking ahead, the report said: “Consumers expect to spend more in the next three months on small-ticket items and essentials. However, looking further ahead, the prospect of higher inflation and the start of the formal Brexit process in 2017 could pose challenges to consumer spending power and sentiment in the fourth quarter.”

Deloitte's quarterly survey of 3,000 UK consumers was carried out between 16 September 2016 and 19 September 2016.