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Post-Brexit vote consumer confidence recovery slows down

Published 28/09/2016

Fears over Brexit could rise amid speculation Article 50 could be triggered in the next year
Fears over Brexit could rise amid speculation Article 50 could be triggered in the next year

Recovering consumer confidence after the Brexit vote has slowed as employees' workplace fears grow for the year ahead, a survey suggests.

Confidence increased by one point in September to 111.1, according to the YouGov/Cebr Consumer Confidence Index, following last month's figures which showed the highest month-on-month improvement in three and a half years.

While confidence continues to recover the ground it lost in the direct aftermath of the Brexit vote, it has not yet made up all of the losses it suffered in the month after the referendum to remain more than two points shy of the pre-vote score.

Underlying measures of job security and household finances both decreased over the past month while people are also more pessimistic about business activity in their workplace over the year ahead.

The figure for job security over the next 12 months is at its lowest level since February and its second lowest level in 20 months.

However, overall consumer confidence has improved because measures for house values and business activity over the last 30 days have gone up and people's expectations for their household finances and house values in the year ahead have also strengthened notably.

Scott Corfe, director at the Centre for Economics and Business Research (Cebr), said: "Though the economy is showing few - if any - signs of a Brexit-induced slowdown, consumers have not quite regained their pre-referendum confidence.

"It may be that this changes over the coming weeks if economic data remain fairly solid. However, there are fears about the longer-term impact of the vote.

"Although consumers are showing good signs of regaining their confidence in a number of areas over the past couple of months, there are on-going workplace fears for the year ahead. While these exist they will act as a handbrake on the post-referendum recovery in consumer confidence."

Stephen Harmston, head of YouGov Reports, said: "After the surge in consumer confidence in the past couple of months, this month's figures tell us where we are now and also hint at what's on the horizon.

"The business activity and job security figures for the coming 12 months imply that consumers are starting to factor in Article 50 being triggered in the next year. This suggests that the referendum's impact on the economy has been deferred for the time being rather than averted entirely."

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