Consumer confidence falls as Brexit uncertainty takes toll

GfK’s Consumer Confidence Index was down two points to -14 in October – when all five measures of sentiment decreased. A three point fall in confidence in people’s personal situation in the coming year, a key measure for retailers, will worry the industry.

GfK client strategy director Joe Staton said: “In the face of continued Brexit uncertainty, the overall index score fell this month. Importantly, the ongoing machinations in Westminster appear to be impacting how we view our personal financial situation for the coming year, with a notable fall in this measure in October. Is this an early sign of long-running weak economic confidence spreading to the way we view money matters?

“This deterioration in sentiment regarding our personal financial affairs is worrying as strong consumer spending has been the main driver of economic growth since the referendum in 2016 against a backdrop of low inflation, low interest rates, low wage growth and high employment.

“Does reduced confidence in personal finances for the year ahead pose a risk to the wider economy? Nobody wants to see consumer spending reduce and let’s hope it doesn’t happen.

“But Brexit’s continuing uncertainty and the spectre of a general election is not helpful. People can only feel confident if they believe the external environment is stable, yet consumers are witnessing too many Brexit shifts and surprises, too many Brexit timelines and counter-proposals, to justify any longer-term confidence. The big black Brexit cloud is refusing to shift.”