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UK consumers least confident in over a year on economic uncertainties

Friday, February 26, 2016 - 08:48

[LONDON] British consumer morale fell to its lowest in over a year in February as concerns over the economic outlook hurt sentiment, a survey showed on Friday.

Market research firm GfK said its overall consumer sentiment indicator fell to 0 in February from +4 in January - its lowest since December 2014.

Britain's economy leaned heavily on consumer spending drive its growth in the last three months of 2015, according to official figures on Thursday.

Bank of England policymakers are watching for signs that a darkening global economic outlook and an imminent referendum on Britain's membership of the European Union are weighing on households.

sentifi.com

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"Despite the positive impact of continued low interest rates and subdued inflation on our day-to-day household budgets, the feeble outlook for growth and a variety of economic uncertainties since the start of the year has depressed our New Year optimism," Joe Staton, head of market dynamics at GfK, said.

While consumers remained broadly confident about their personal finances, with inflation still hovering near zero and interest rates at record-lows, they were downbeat about the broader economic situation.

The survey's measure of how households are feeling about the economy's propsects for the next 12 months declined sharply to -12 from -5, its lowest level since mid-2013.

The possibility that Britain will leave the EU sent sterling plummeting 3 per cent against the US dollar this week, after the government announced June 23 as the date for the referendum.

Economists are also worried about the implications of a British exit, with all but one in a recent Reuters poll expecting the economy to be worse off if Britain decided to leave the world's largest trading bloc.

REUTERS

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