With the fear of a messy no-deal Brexit looming over the UK economy, consumers are worried about their personal finances and economy in general. As per the data put out by GfK, consumers are controlling their expenses. For the first time in the last six years, the UK consumer confidence has dropped. It plummeted to minus 14 in August from minus 11 in July. The consumer confidence index, which keeps the track of people’s financial position in the economy, dropped more than what analysts expected, which was minus 12. It fell nearly to the level back in 2011-13 when recession forces shook the economy.
Slump in the figure, adds to the agony of already hurting the British economy. What made things worse was UK Prime Minister, Boris Johnson’s decision to suspend the Parliament weeks before the Brexit. The no-deal Brexit anxiety turned the market volatile and even pulled pound down by 1.1% against the dollar.
Joe Staton, client strategy director at GfK, “If there is a continuation of that dip in our feelings about our future wallets, we’d quickly see a headline score crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis.”
It is not only consumer confidence but also business sentiment which crashed as the companies put the hiring on hold and freeze their spending. Britain’s prospect of leaving the EU without a deal prompted business customers to hold tight their cash instead of making investments, generating growth and jobs.
Suren Thiru, the head of economics at the British Chambers of Commerce, said reports of gloomy economic outlook does not come as a surprise. He said, “We are hearing this from businesses across the UK. They are taking a step back and putting off investment and recruitment decisions because there isn’t a path forward for Brexit and economic conditions are weakening.”