Somewhat unsurprisingly, consumer confidence has slumped following the vote to leave the EU and the subsequent political fallout.
The YouGov/Cebr Consumer Confidence Index, which measures people’s economic sentiment on a daily basis, stood at 111.9 in the first three weeks of June but in the days since the vote it has fallen to 104.3.
The researcher said that four days of uncertainty have wiped out the gains made over the last three years. The last time consumer confidence was at this level was in May 2013. While it has not yet plumbed the depths of the financial crisis in 2008, when it fell to a score of 67.4, it is only a week after the referendum and YouGov said it fully expected it to decline further as the consequences of Brexit kick-in.
It added that its latest data shows just how spooked households are by recent developments. In the coming months this is likely to filter through into a much weaker environment for retail sales and household spending – particularly on big ticket items.
Separate data from GfK, which covered the period running up to referendum, also showed that consumer was low. Its Consumer Confidence Index remained the same in June at -1 after a weak result in May. While the index relating to the forecast for personal finances over the next 12 months rose by one point to 8 this month, the index measuring expectations for the general economic situation over the next 12 months fell by one point to -14. This is 18 points lower than in June 2015.
Joe Staton, Head of Market Dynamics at GfK, commented: “This month’s GfK Consumer Confidence Index is based on interviewing carried out in the first two weeks of the month, as is the case every month. So our current data – using interviews from between June 1st and June 15th – clearly does not yet provide insights into how the major impact of the EU Referendum result has changed consumer sentiment.
“Nevertheless, one trend that continued in the run up to the referendum is a deepening pessimism over the general economic situation. As we approached voting day, this was already 18 points lower than in June 2015 and it’s almost certain we’ll see this worsening when next month’s results are in. Before the referendum there was an uptick in confidence about personal finances, and as of mid-June this measure was more positive than 12 months ago. But once again it is difficult to see this holding up.
“In these extraordinary consumer circumstances, all bets are off until we all know more. We can expect plenty of volatility in consumer confidence at least until Brexit negotiations are underway. The longer term mood will then depend on how smoothly those negotiations go.”
- Having tasted some discretionary decision-making via Brexit voting, the consumer will become increasingly savvy, increasing their appetite – and appreciation of – demonstrable value for money…
- Causing many to cut spending until they rely upon the contents being in excess of what it says on the tin…
- How long to return to normal?
- Why not try a what-if on these appetites – and value-systems – being a permanent feature of the newly emerging landscape?