U.K. Consumer Confidence Falls Again

By Wiktor Szary Features Dow Jones Newswires

U. K. consumers' mood soured again unexpectedly in July, a survey published Friday showed, with the headline index falling to the level last seen in the immediate aftermath of the Brexit vote as Britons grew uneasy about the country's economic situation.

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The long-running barometer of consumer confidence, conducted by market researcher GfK U.K. Ltd for the European Union's executive, slipped by two points following a five-point drop the previous month, and stood at minus 12.

The decline in sentiment -- driven largely by a sharp drop in confidence in the U.K.'s economy, over the past year as well as the year ahead -- surprised analysts polled by The Wall Street Journal, who had expected no change against the June reading.

The survey saw a small bounce in consumer views of personal finance looking ahead -- the only measure that was up compared with the previous month.

"All bets must now be on a further drift downwards in confidence," said Joe Staton, head of market dynamics at GfK.

Consumer resilience helped the largely domestic-driven U.K. economy to weather the initial post-referendum uncertainty and grow at a healthy clip last year.

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But accelerating inflation, spurred by the pound's post-referendum depreciation, has recently outpaced growth in Britons' wages, squeezing their wallets. This caused shoppers to pare back spending, and resulted in the economy slowing sharply in the first quarter.

Growth remained subdued in the second quarter, as a modest revival in consumer spending offset shrinking industrial production, a sign that a hoped-for shift toward export-led growth remains elusive.

Write to Wiktor Szary at Wiktor.Szary@wsj.com

(END) Dow Jones Newswires

July 27, 2017 19:15 ET (23:15 GMT)