UK shoppers bounce back from Brexit confidence slump

Respected survey posts gains in all areas it covers following biggest crash in 26 years after Brexit vote

The GfK survey has shown confidence increasing in each area after record falls (PA)

British consumer confidence has staged a Brexit bounce-back after a sharp post-referendum dip according to the respected GfK survey of shoppers' attitudes.

The UK Consumer Confidence Barometer jumped five points after experiencing its biggest dip in 26 years after the Brexit vote.

The survey posted gains in all of the areas it covers, with shoppers saying they were more confident in their personal financial situation and more upbeat about the economy as a whole.

Strikingly, the numbers also point to an increased willingness to dip into savings to fund purchases as the savings index fell from one to minus 15.

Shoppers also reported that they are once again willing to splash out on big purchases again having adopted a wait-and-see approach in the run-up to the referendum vote and its immediate aftermath.

The index remains in negative territory at minus 7, up from its July slump of minus 12, but still far ahead of the lows of minus 39 witnessed during the depths of the 2008 recession.

However, each of the five measures in the survey has some way to travel to regain the levels seen at this time last year, when the main index was at 7.

The data is considered a valuable insight into the outlook for the economy as it is conducted Europe-wide and has been carried out since 1974.

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.”

Last month the Bank of England cut its interest rate to a new record low of 0.25 per cent after a series of downbeat economic indicators in the wake of the referendum.

But UK consumer spending, for several years the engine of British economic growth, has shown resilience. Last month, retail spending data from the Confederation of British Industry showed firms reporting increasing sales.

Economists have warned that the good news may not last. The double-digit fall in the value of the pound will eventually push up prices as imports become more expensive and hit spending power, Anna Leach, CBI’s head of economic analysis said.

“While the fall in sterling has boosted visitor numbers to the UK, it is likely to push up the price of imported goods over time, which will mean households will be more likely to rein back spending on non-essentials,” Ms Leach said.