UK consumer confidence drops in February

London - British retailers and fashion companies will be in for a shock as consumer confidence dips in February with Brexit and rising interest rates becoming reality.

Research from Gfk, a company that provides global market insights, shows UK Consumer Confidence has dropped by one point in February to -6.

Joe Staton, Head of Market Dynamics at GfK, stated: "Against a backdrop of rising food and fuel prices, sterling depreciation, nominal earnings growth and a burgeoning fear of rapid inflation, concern about our personal financial situation for 2017 has contributed to a drop in UK consumer confidence this month (to -6)."

The post Brexit boom is over

"Any momentum behind the post-Brexit, debt-fuelled, consumer-spending boom now appears to be softening. Mounting pressures on disposable income are starting to bite as witnessed by two months of falling retail sales (ONS) and a further drop in the Major Purchase Index (this month down by five points). Consumer spending continues to drive economic growth in the UK so any further fall in confidence could support forecasts for a slowdown of the overall economy this year.”

Retailers can expect consumers to tighten their belts and reduce spending over the coming months.

The measure for the General Economic Situation of the country during the last 12 months has increased three points this month to -21; this is 11 points lower than February 2016.

Expectations for the General Economic Situation over the next 12 months have increased three points this month to -20; this is eight points lower than February 2016.

The UK Consumer Confidence Barometer is conducted by GfK on behalf of the EU, with similar surveys being conducted in each European country. In producing its own reports on the whole of Europe, the EU applies a seasonal adjustment to the data, to smooth out any changes that are functions, at least in part, of the time of year.

Photo Credit: Oxford high street shoppers by Doc Searls via Wikimedia Commons