A key bellwether for the United Kingdom’s economy is having a cruel, cruel summer.
GfK’s long-running monthly Consumer Confidence Index joined the jumble of measures reporting post-Brexit blues, plunging 11 points to reach negative 12 in July—the steepest month-by-month drop recorded by the market research institute for more than 26 years.
“Consumers in post-Brexit Britain are reporting higher levels of concern this month. We’ve seen a very significant drop in confidence, as is clear from the fall in each of our key measures, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months (-19 points),” Joe Staton, head of market dynamics, said. “Although the rate of decline is slower than reported in the aftermath of the vote to leave the EU, consumers in the U.K. were also less optimistic about the state of their personal financial situation going forward (-9 points).”
However, he pointed out that even with such a drop, the index continues to remain at a “relatively elevated level by historic standards.”
To that end, its future trajectory depends on whether the U.K. enters a new period of damaging economic uncertainty or restores confidence by embracing a positive stance on negotiating a new deal for the country.
It’s been a little more than a month since Britain voted to leave the EU and since then, several indicators have painted a worrying picture. Retail sales fell 3.6% year-on-year in June, according to accountancy firm BDO, while numbers from the British Retail Consortium found that footfall was 2.8% lower in the five weeks ended July 2.