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Consumer confidence at three-year high as EU referendum fears recede

By Josie Clarke

Published 26/08/2016

Consumer confidence has risen at its fastest monthly rate in three-and-a-half years as Brexit jitters ease, a survey has found
Consumer confidence has risen at its fastest monthly rate in three-and-a-half years as Brexit jitters ease, a survey has found

Consumer confidence has risen at its fastest monthly rate in three-and-a-half years thanks to the easing of Brexit jitters, according to a survey.

In a dramatic turnaround from last month, the YouGov/Cebr Consumer Confidence Index saw its highest monthly bounce since February 2013 of 3.2 points to 109.8.

The poll revealed increases in people's expectations for their financial situations and property values over the coming year.

All four measures looking back over the past 30 days have improved - household financial situation, property value, job security and business activity in the workplace.

August's rise follows July's sharp fall to the index's lowest point in three years following the vote to leave the EU.

However, despite the strong improvement, confidence has only recovered around half of the ground that it lost in the wake of the referendum.

Cebr director Scott Corfe said: "This month's improvement in consumer confidence follows positive news from other areas of the economy and slightly punctures the arguments of those who predicted immediate economic Armageddon following a Brexit vote.

"With consumer confidence rising and year-on-year retail sales up, it is evident that the public have yet to feel many - if any - effects from the vote to leave the EU."

But he warned: "Both inflation and unemployment are low, for now, which is undoubtedly supporting consumer optimism.

"However, this could easily change next year as the weakness of sterling pushes up the cost of imports.

"Next year could be the year that consumers stumble."

Stephen Harmston, head of YouGov reports, added: "For all the talk of doom and gloom - both in the months leading up to the referendum and in the days following it - most consumers have yet to feel much tangible impact of the vote to leave the European Union.

"It is clear that the panic that gripped the public in the immediate aftermath of the referendum has subsided as institutions like the Bank of England take decisive action and the result becomes a part of life.

"Of course, everything could change once the details of the deal to leave the EU emerge and the process of extracting ourselves from the EU becomes a reality."

The most recent Northern Ireland purchasing managers' index from Ulster Bank indicated a drop in business activity during July in the aftermath of the referendum.

Belfast Telegraph

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