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Consumer confidence in UK economy hit by 'Brexit jitters'

Published 31/03/2016

Confidence in the UK economy for the next year slumped to minus 12 in March, the report shows
Confidence in the UK economy for the next year slumped to minus 12 in March, the report shows

Consumers have seen their confidence in the UK economy knocked by fears of a British exit from the European Union, according to a report.

It found that c onfidence in the UK economy for the next year had tumbled to minus 12 in March, down from a positive reading of 6 for the same month last year.

However, consumers felt upbeat about their personal finances for the next 12 months , with a positive reading of 9 for March, up from a positive reading of 7 for the same month in 2015, according to the GfK Consumer Confidence Index.

It means the overall index score for consumer confidence remained at zero for second month running.

Joe Staton, head of market dynamics at GfK, which carried out the study on behalf of the European Commission, said the fall could be blamed on "Brexit jitters".

He added: "Looking at how consumers see the wider economy developing over the next 12 months, we are 18 points lower this month than in March 2015.

"So, despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing Eurozone crisis appear to be hitting home."

The concerns come as a separate study by Lloyds Banking Group revealed UK business confidence had bounced back from a two-year low last month.

UK business confidence levels rose by 15 points to 43% for March, up from a net balance of 28% in February.

The move was driven in part by an upbeat outlook from consumer services and less concern about market volatility.

It also found that the net balance of firms reporting an improvement in their economic prospects increased to a three-month high of nearly 40% in March.

It said about 40% of companies expect to take on more staff over the next 12 months.

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