Consumer confidence falls at sharpest rate in 26 years amid Brexit 'concern'

According to the GfK Consumer Confidence Index, sentiment fell 11 points from -1 to -12 in July, the first full month since Britain’s shock decision to leave the EU.

The slump was the steepest monthly drop since March 1990.

It was also a further three point fall compared to GfK’s special Brexit survey, conducted earlier this month, when consumer confidence stood at -9.

The figures came hot on the heels of data from business advisory firm Deloitte and a joint survey from YouGov and the Centre for Economics and Business Research (CEBR).

Deloitte’s survey suggested that consumer confidence was resilient in the aftermath of Brexit, remaining flat in the days following the referendum.

However, the YouGov CEBR research suggested that confidence had fallen to a three-year low.

GfK’s index revealed that all five measures used to calculate consumer confidence fell in July.

The steepest slump was in people’s optimism about the UK economy over the next 12 months, which crashed by a “dramatic” 19 points month-on-month from -14 in June to -33.

That also marked a nosedive from a score of 1 in July 2015.

Consumers’ confidence in the general economic situation over the past year dropped 12 points month-on-month to -25, while shoppers’ willingness to make big ticket purchases also suffered, as the major purchase index fell 11 points to -2 – although this marked an increase of one point compared to GfK’s Brexit special at the start of the month.

Brits were more optimistic about their personal finances than they were about the wider economy, although confidence still declined.

Confidence about personal finances in the coming year dropped nine points from eight in June to -1 in July, while optimism about personal finances over the previous 12 months was down seven points month-on-month to -1.

GfK head of market dynamics Joe Staton said: “Consumers in post-Brexit Britain are reporting higher levels of concern this month.

“We’ve seen a very significant drop in confidence, as is clear from the fall in each of our key measures, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months.

However Staton observed: “The Index continues to remain at a relatively elevated level by historic standards.

“Its future trajectory depends on whether we enter a new period of damaging economic uncertainty or restore confidence by embracing a positive stance on negotiating a new deal for the UK.”