UK households less confident as economy worries grow: survey

[LONDON] British households turned less confident in May, reflecting uncertainty about the economy's prospects ahead of Brexit next year, according to a survey published on Friday.

YouGov, a polling firm, and the Centre for Economics and Business Research, a consultancy, said their consumer confidence index fell to 108.4, down 1.4 points from April.

"If confidence doesn't recover soon it could damage second-quarter growth prospects, which is especially undesirable given the weak performance at the start of the year," Nina Skero, Head of Macroeconomics at CEBR, said.

Britain's economy slowed sharply between January and March, hurt by heavy snowfall and by the squeeze on consumer spending from high inflation and weak wage growth for much of the past year.

The YouGov confidence index remains below the level of 113.6 seen in May 2016, shortly before the EU referendum.

The job security index for the coming year fell to 109.5 from 113.5 in April, its biggest monthly fall since July 2013, despite the unemployment rate sitting at its lowest level since the 1970s.

"Consumers are increasingly aware that the UK's economic prospects have soured slightly of late and that this may have implications for their careers in the year ahead," said Christian Jaccarini, economist at the CEBR.

However, household finances improved for the fifth month in a row and expectations for the year ahead were their highest since September 2016.

Britain's inflation rate has fallen in recent months while wage growth has picked up.

REUTERS