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UK consumer confidence drops to lowest level since Brexit vote

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Sentiment among UK households fell to its lowest level since the Brexit vote as the rising cost of living and inconclusive general election deterred Britons from spending on big-ticket items.

[LONDON] Sentiment among UK households fell to its lowest level since the Brexit vote as the rising cost of living and inconclusive general election deterred Britons from spending on big-ticket items.

GfK's consumer-confidence index dropped to minus 10 this month from minus 5 in May, the market-research firm said Friday. Its survey of 2,000 Britons, carried out before and after the June 8 election, found their attitude toward the economy and their personal finances deteriorated. A gauge of their inclination to make major purchases also plunged to the weakest since the European Union referendum a year ago.

The findings point to continuing pressure on consumer spending, the engine of the British economy. With Prime Minister Theresa May reliant on the support of a Northern Ireland party to stay in power as complex EU negotiations get under way, households are facing heightened political uncertainty at a time when rising inflation triggered by the weaker pound is eating into their incomes.

The survey "reveals a sharp drop in confidence among consumers across all measures," said Joe Staton, head of market dynamics at GfK.

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"The twin pressures of higher prices and sluggish wage growth are squeezing household finances and adding to widespread fears of a Brexit-induced economic slowdown."

June's decline left the index of overall confidence just shy of last year's post-referendum low, reflecting consumers "negative sentiment" about their personal financial situation and expectations for the wider economy, Mr Staton said. GfK carried out its survey between June 1 and June 15.

In a separate report on Friday, Lloyds Bank Commercial Banking said business confidence rose this month and hiring intentions strengthened "significantly," citing a survey of 300 companies. Still, firms' economic optimism fell to a five-month low, the bank said in its latest Business Barometer, suggesting some concern about wider prospects remains.

Lloyds also conducted its study before and after the election, and post-vote data - accounting for more than half of the responses received - indicate the mood among businesses soured.

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