Market research firm GfK said its consumer sentiment indicator for April was the weakest for 15 months as households became gloomier about the UK’s economic outlook. The index dropped to -3 from a March reading of 0, when GfK also claimed referendum jitters had hit consumer confidence.
The latest survey of 2,000 people conducted in the first two weeks of April showed confidence dropped in all the areas measured: their personal financial situation, their view of the UK economy and whether now was a good time to make big purchases.
The report’s compilers linked the gloomier picture to discussions around how the UK economy would fare outside the EU in the event of a vote to leave. They also cited renewed signs of political and financial turmoil in the eurozone over Greece’s troubled bailout programme.
“Mixed messages about a post-Brexit world and the ongoing eurozone crisis are casting a cloud over our economy,” said Joe Staton of GfK.
“The biggest dent to confidence comes from consumers’ depression [concerns] about the general economic situation in the UK for the next year, dropping 20 points in 12 months. Against this backdrop, even faith in our personal economic fortunes has taken a battering, contributing to the overall fall in the numbers.”
Economists are divided over how much of the recent slowdown in UK growth is down to fears of Britain voting to leave the EU. Official figures this week showed GDP growth dropped to 0.4% in the first quarter of 2016 from 0.6% in the final three months of 2015.
The Bank of England recently predicted that economic growth could slow further in the coming months as companies defer spending until after the 23 June vote.
Business surveys have pointed to companies holding off on investment and hiring decisions, but it has been less clear what impact, if any, the referendum was having on consumer spending.
The chancellor, George Osborne, who is campaigning for the UK to remain in the EU, has sought to persuade voters to back him by using figures from a Treasury analysis to claim every household would be thousands of pounds worse off if Britain left.
But backers of a vote to the leave have rejected the figures and accused the Treasury of failing to account for savings from lower regulation if Britain were to leave the EU. Vote Leave, the leading out campaign, also said officials had failed to look at potential benefits from lower migration and from trade deals with other non-EU countries.
A separate poll on Friday pointed to waning business confidence in April. There was a sharp rise in those companies describing themselves as pessimistic about the economy in the latest the Lloyds bank commercial banking business barometer.
Companies were also less upbeat about hiring new staff although there was a rise in the net balance of companies reporting an improvement in their own trading prospects.
This article was written by Katie Allen, for theguardian.com on Friday 29th April 2016 01.05 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010