UK Consumer Confidence Falls Steeply as Brexit Talks Begin
U.K. consumers' mood soured significantly in June, a survey published Friday showed, as Britons became increasingly concerned about the country's economy as well as their own financial situation, and grew uneasy about splashing out on big-ticket items.
The survey covers the period before and after the June 8 general election, which saw the Conservative government lose its parliamentary majority just as Britain embarked on complex negotiations with the European Union over exiting the bloc.
The long-running barometer of consumer confidence, conducted by market researcher GfK U.K. Ltd for the European Union's executive, slipped by five points following a two-point increase the previous month, and stood at minus 10.
This was only slightly above the minus 12 reading seen in the immediate aftermath of the Brexit vote last year.
The scale of the June decline in confidence surpassed the expectations of analysts' polled by The Wall Street Journal, who forecast only a modest, one-point drop.
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.
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.
"The twin pressures of higher prices and sluggish wage growth are squeezing household finances and adding to widespread fears of a Brexit-induced economic slowdown," said Joe Staton, head of market dynamics at GfK.
Write to Wiktor Szary at Wiktor.Szary@wsj.com
(END) Dow Jones Newswires
June 29, 2017 19:15 ET (23:15 GMT)