Global consumers lose confidence in UK

The UK is quickly losing the confidence of global consumers as new insight shows morale collapsed following the result of the EU referendum.

According to Nielsen's Global Survey of Consumer Confidence and Spending Intentions, the UK has gone from being the second most confident country in Europe to ninth place, behind Denmark.

The survey shows British households have cut their spending at the highest level for two years in the second quarter of 2017, due to the collapse in sterling since the referendum and subsequent inflation compounded with slow wage growth.

According to the Office for National Statistic, inflation peaked at a four-year high in May at 2.9 per cent before easing back to 2.6 per cent last month.

Nielsen’s survey said that almost half the country, or 45 percent, think the UK is going through a recession. However, despite the UK’s dramatic drop from second most confident country in the EU, its score of 99 points remains higher than the European average of 85.

The weakened sterling is affecting shop prices

“A variety of factors has contributed to people tightening their purse strings,” Nielsen UK managing director Steve Smith stated. “The pound’s weakness against both the dollar and the euro is finally feeding through to shop prices which means real inflation is running at over 2.5 per cent. In turn, this remains ahead of general wage growth and consequently, real household disposable income is being squeezed.”

Nielsen Holdings is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with total audience measurement services for all devices on which content including video, audio and text is consumed. Nielsen's also offers consumer packaged goods manufacturers and retailers a global view of retail performance measurement.

Photo credit: Nielsen.com, article sources: Nielsen.com, retailgazette.co.uk