British consumer confidence has fallen to its lowest level in five years in the wake of the UK’s decision to leave the EU, new figures have revealed.
In a post-Brexit survey by market research company GfK, consumer confidence dropped to -9, marking the steepest decline since January 2011.
In the run-up to the referendum vote on June 23, consumer confidence was already showing signs of apprehension, dropping to -3 in April and sitting at -1 in May and June.
The index is now at its lowest level since December 2013.
The survey revealed that six-in-10 respondents expected the general economic situation to get worse over the next 12 months, up from 46 per cent in June. Only 20 per cent of consumers said they expected it to improve.
The number of people who expected prices to increase rapidly in the next year was up 20 percentage points, from 13 to 33 per cent.
GfK also reported that the 48 per cent who voted to stay in the EU were more pessimistic than the 52 per cent who voted to leave.
Meanwhile, John Lewis managing director Andy Street has echoed this concern. He said he believed the weak pound would drive costs higher in the next year.
“We hedged this year, but the issue is next year – it will have an effect,” Mr Street said. “If inflation gets into the value chain, it will feed through.”
“For us to start being concerned, the obvious thing is a reduction in the growth in consumer spending. But has it actually changed behaviour? It’s just far to soon to say.”
Said GfK’s head of market dynamics Joe Staton: “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.”