Rocked by Brexit, UK consumer confidence ends the year in the doldrums: Report

Union flags are attached between buildings along Oxford street in central London on June 27, 2016.
Odd Anderen | AFP | Getty Images
Union flags are attached between buildings along Oxford street in central London on June 27, 2016.

After a year that saw the country vote to leave the European Union, the United Kingdom's consumer confidence ended 2016 way down on the start, despite a slight rebound in the autumn, the latest GfK index records.

The overall score of GfK's Consumer Confidence Index rose from -8 to -7 in the final two months of 2016. However, the results were still way down on January, which recorded a reading of +4.

However, the overall result for December hid a mixed bag of indicators with two of the given measures increasing, while three others decreased.

The biggest gainer was the "major purchase index," up seven points since November – and five points higher year on year. Joe Staton, head of market dynamics at GfK, attributed this to U.K. consumers' pragmatic understanding that "now is a good time to buy" resulting in "strong retail sales growth," in a statement accompanying the latest index.

But, the "general economic situation" measure over the last twelve months was down one point to -26, 21 points lower than December 2015's score. Survey respondents' expectations of their general economic situation over the next 12 months are also down one point over the next twelve months at -23, in contrast to -6 in December 2015.


With regards to the "personal finance situation" of those surveyed in the past 12 months, GfK's index decreased by three points year on year to a score of 0 this December, down one point from the previous month. Respondents' forecast for their personal finances over the coming 12 months was equally downbeat, also dropping by one point between November and December.

GfK's sample of 2,039 individuals in the U.K. was carried out between December 1 – 15 of this year, and was conducted online.

Staton said in the data's press release that, "the past 12 months were a really turbulent year for confidence in the UK as consumers reacted to the dramatic economic and political turmoil of 2016."

He added that "confidence in the general economic situation of the UK has collapsed" due to the country's future being in limbo in the light of its vote to leave the European Union.

Staton detailed the U.K. index's overall narrative for 2016, which began positively but plunged post-Brexit. Any recovery in the autumn ended up "evaporating by year-end to limp home at -7 for December." He added that Brexit negotiations, the fall in the value of sterling and the prospect of higher inflation would provide "storm and stress" to the U.K. consumer confidence in 2017.

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