British Consumers 'resolutely Gloomy' About Economic Outlook As Confidence Plummets

British consumers are "resolutely gloomy" about the economic outlook and confidence has tumbled to the lowest level since immediately after the Brexit referendum, a new survey has shown.

The GfK consumer confidence index declined from -10 in October to -12 in November, the lowest level since July 2016 and a point lower than analysts had forecast.

Joe Staton, head of market dynamics at GfK, said the survey was particularly worrying for retailers in the lead-up to Christmas.

"Sadly, there's no festive cheer," he said.

"This will be an acute concern for retailers as they gear up for the key Christmas selling period. Household jitters following the recent interest rate hike, squeezed incomes, higher inflation and economic uncertainty have dampened the consumer mood across the UK."

Data released earlier this month by the Office for National Statistics (ONS) showed retail sales recorded their first annual decline in four years, despite rising slightly more than expected in October. Meanwhile, a separate survey from Visa and IHS Markit warned that consumer spending in the UK during the crucial festive period is set to fall for the first time since 2012.

The GfK report contrasts with data released by the ONS last week, which suggested the UK economy grew in line with expectations in the third quarter of the year as household spending increased at the fastest pace in a year.

Consumers, Staton added, were "resolutely gloomy" about the economic outlook and the GfK survey recorded a sharp drop in the major purchase element of its index.

Last week, the Office for Budget Responsibility (OBR) downgraded its forecast for economic growth. The OBR now expects Britain's economy to grow by 1.5% in 2017, down from the 2% forecast made in March.

Economic growth has also been cut to 1.4% in 2018, 1.3% in both 2019 and 2020, but growth would subsequently pick up back to 1.5%, and finally 1.6% in 2022.

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