UK consumer confidence slides back to levels post Brexit vote

Economic confidence among British people has deteriorated to its lowest print since the Brexit referendum, according to a widely followed survey released on Friday.

Gfk's consumer confidence index weakened to -12 in July from -10 the month before, with four of its five segments on the wane.

Consumer confidence about the wider economic situation currently and for the future worsened considerably.

The measures of people's confidence about the general economic situation over the next 12 months fell five points to -28, while perceptions about the past and current situation plunged six points to -31.

But people's confidence about their own personal financial situation for the coming 12 months actually rose, climbing two points to +2.

Joe Staton, Gfk's head of market dynamics, said confidence has fallen to the level last seen in the immediate aftermath of the Brexit vote, as the economic picture across the UK "remains confusing".

"All bets must now be on a further drift downwards in confidence. Yes, employment is booming, but wages have fallen in real terms since 2008 once inflation is taken into account.

"And while consumers have increased borrowing to carry on spending, the household savings ratio is now at a record low," he said, adding that if Brexit negotiations continue to deliver more questions than answers, it’s unlikely the index will find any tailwinds for some time.

Economists at Barclays noted that the headline index was six points below its one-year trailing average and three below its long-term average for the second consecutive month.

"Expectations on the general economy may reflect a difficult start of the Brexit negotiations. The lack of agreement between parties in the first round of Brexit talks and divisions within the Conservative party are likely contributors to deteriorating economic sentiment, as long-term prospects remain unclear," they said.

Barclays added: "Given that we expect real wage growth to remain bleak over the course of 2017, it would not be unreasonable to see sentiment continue to moderate in the months ahead. Furthermore, given consumers’ intent to purchase broadly matches private consumption, further weakness would only underscore our view that consumption is set to slow as 2017 progresses."