British consumer morale recovers some of its Brexit slump in August
LONDON – British consumer morale in August recovered some of its post-Brexit slump, a survey showed on Wednesday, a latest sign that consumers are adjusting to the decision to leave the European Union.
Market research firm GfK said its gauge of consumer confidence rose to -7 in August from -12 in July, when it suffered its sharpest drop in over 26 years. But August’s level was still the second-lowest since early 2014.
The improvement was in keeping with recent data suggesting consumers have remained resilient after the June 23 referendum, even though there have been some indications that they are more reluctant to make big purchases than before the referendum.
GfK’s index measuring major purchases rose to +7 from -2 in July.
The survey was conducted between Aug. 1 and 16, after Theresa May calmed the political fallout from the Brexit vote by taking over as prime minister. It also covered the period after the Bank of England cut interest rates on Aug. 4 as part of an aggressive stimulus package.
“We’re reporting some recovery in the index this month as consumers settle into the new wait-and-see reality of a post-Brexit, pre-exit UK,” Joe Staton, head of market dynamics at GfK, said.
“The uptick in confidence is driven by good news from hard data, the combination of historic low interest rates matched with falling prices and high levels of employment.”
Official data has shown retail sales jumped last month and there was no immediate sign of a big hit to employment.
Expectations for the general economic situation over the next 12 months improved to -22 from -33 in July but remained down from +3 a year ago. Britain has yet to trigger formal exit talks and to start formal negotiations on its new relationship with the EU, something which is only likely to be resolved in 2019 or later. -Reuters