Consumer confidence dips to six-year low ahead of Brexit deadline
- Confidence dropped to 103.4 in September, the lowest level since May 2013
- Most Britons expect recession and rise in unemployment over coming year
- Respondents grow more pessimistic on business activity and household finances
With just a month to go until the Government’s Brexit deadline, but no sign of a workable deal with the EU, consumer confidence has continued its long-term downward trend. The latest analysis from YouGov and the Centre for Economics and Business Research shows that Britons became more pessimistic about job security, business activity and their household finances during September.
The headline consumer confidence measure dropped to 103.4 in September from 104 the previous month. The figure has now either dropped or remained static for five consecutive months, and is more than four points lower than this time last year.
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While any score over 100 means more consumers are confident than unconfident, the index is still notably below where it was before the UK voted to leave the European Union in 2016. In fact, you have to trace the history of the YouGov/Cebr tracker back to May 2013 to find lower confidence, when we saw a figure of 102.9.
YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents are asked about household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months.
Just two of the eight metrics which make up the overall figure rose over the last month.
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Respondents were less confident about the state of their household finances during September (down a whole point from August to 93.8) and expectations over the coming year were down 1.6 points to 93.2.
They were likewise more pessimistic about their perceived job security, with respondents sending the metric for the last month down 1.4 points to 92, and their expectations for the coming year down 0.2 points to 112.4.
Some 64% of Britons now believe that unemployment will rise over the coming year (up a single percentage point on last month) and 75% think the economy will be in a depression or a recession (unchanged from last month). Unsurprisingly, given that pessimistic outlook, the estimate of business activity over the past month fell 2.1 points to 106.2 and the outlook for the coming year was down 4.8 points to 109.4.
The only measures which remained buoyant over September related to house prices. Despite expecting a rise in unemployment and troubled waters for the UK economy, Britons are confident about their house value in both the short term (up 2.2 points to 109.2) and long term (up 4.7 points to 110.9).
Oliver Rower, Director of Reputation Research at YouGov, said:
“Our data shows that confidence continues to slide as Britain lingers in uncertainty. Not only that, but we also see that most Britons expect things to get worse yet, and that the economy will slide into recession or even depression.”
Kay Daniel Neufeld, Head of Macroeconomics at the Centre for Economics and Business Research, said:
“The sentiment among UK consumers continues to darken as the YouGov / Cebr consumer confidence index drops to a six-year low. With measures on household finances, business activity and job security all in decline, the gloom is widespread and touches on almost all sectors of the economy. It is clear now that the UK has shifted into a slower growth mode due to a combination of ongoing domestic political uncertainty and global economic headwinds. So far, consumers have been spared the worst of it as the labour market continues to chug along. However, if the slump deepens and unemployment should start to rise in the coming months, as most Britons expect, consumer confidence might yet have further to fall.”