Consumer confidence in UK down to lowest level in more than a year

news
31 March 2016

Consumer confidence in the UK sank to its lowest level for more than a year as uncertainty loomed over the EU referendum as also the turbulent eurozone economy, according to new figures.

The consumer sentiment indicator from market research firm GfK continued to be zero in March, unchanged from February and its lowest level since December 2014.

Optimism among consumers about the economy over the next 12 months was down 18 points than at the same time last year, at minus 12.

According to Gfk's survey, consumers were less willing to spend on big-ticket items in March than they had been in February.

The poll was important as consumers had been a key driver of the UK's economic recovery over the last few years.

Joe Staton, head of market dynamics at GfK, said, "Despite good economic headlines about low inflation, interest rates and prices in shops, concerns about  Brexit and the ongoing eurozone crisis appear to be hitting home."

The poll follows chancellor George Osborne's warnings about the "dangerous cocktail" of risks from the world economy.

A massive stimulus programme was underway in Europe, for growth revival even as worries over the low oil price and a slowdown in China had hit markets hard.

According to Staton the decline could be blamed on ''Brexit jitters''. He said, ''Despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing eurozone crisis appear to be hitting home,'' The Guardian reported.

In a warning, this week, the Bank of England cautioned that a vote to leave could cause a run on sterling, a credit crunch and higher interest rates for mortgage holders and businesses. The Bank's financial policy committee judged that the closely fought campaign posed the ''most significant near-term'' domestic risk to financial stability.

According to the GfK survey, carried out on behalf of the European commission, consumers continued to be upbeat about the outlook for their finances over the next 12 months, with a reading of 9 for March, up from 7 a year ago. All the same, they were also less willing to spend on big-ticket items than in February.





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