UK consumers are most pessimistic on economy in seven years

[LONDON] UK consumers are the least optimistic about the economic outlook in seven years as a lack of clarity over the nation's exit from the European Union leaves them worried about Britain's prospects.

A GfK gauge of expectations for the UK's general economic situation for the next 12 months has tumbled in the past year, and is approaching levels last seen in the depths of the financial crisis, the firm said in a report Thursday. A headline measure of confidence stayed at the lowest since 2013, GfK said.

The survey chimes with other reports that show the political chaos in Westminster is denting sentiment in the economy. British Prime Minister Theresa May has yet to find a deal that's acceptable to both the EU and Parliament, and the risk of the UK crashing out of the EU without new arrangements is rising as the March 29 exit date approaches.

"Consumers, companies and corporations thrive on certainty, which is in short supply just two months before the planned date for the UK's EU-exit," said Joe Staton, client strategy director at GfK. "The next few months promise to be turbulent for the consumer so will this measure for the economic outlook in the coming year drop even further?"

A separate report from Lloyds highlighted that businesses are also feeling the pressure. While the firm's gauge of confidence edged two points higher this month, it remains considerably lower than 12 months ago.

BLOOMBERG