Economists in a Bloomberg survey predicted a decline to 103.5.
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The Bloomberg study’s “comfort measure” held steady at 42.9 for the week ended July 24, while respondents’ view on the economy fell slightly to 32.7 from 32.8. The unexpected result shocked financial markets and triggered political upheaval in the United Kingdom, which has only recently abated following the appointment of Theresa May as prime minister, replacing David Cameron. The same measure for Britain slumped 4.4 points to 102.6.
Firms said they expected to see a 1% rise in their workload for the next year, compared to 2.8% for the first quarter of this year.
“While we do not expect consumer spending to grow as quickly as anticipated prior to the European Union referendum, we do expect consumer spending to remain resilient”, PwC director Kien Tan said. The consensus in markets is that the quarterly growth rate halved in the second quarter to 0.3 percent.
Although the initial shock of the vote may have receded, its immediate legacy includes a sharp drop in sterling against both the euro and the dollar and Britain’s downgraded credit rating of AA negative.
The Cebr offered a more gloomy outlook, saying the Brexit vote has had a “very real impact” on consumers.
“Lloyds has sounded a note of caution about future prospects given the unfolding implementation of Brexit”, said Laith Khalaf, senior analyst at Hargreaves Lansdown.
Since 2012, British consumers had been becoming increasingly confident.
Now that a new government is in place following the earlier than anticipated appointment of Prime Minister Theresa May, there could be some stabilization in British economic sentiment. Economists expect the Bank of England to cut rates to a new low of 0.25 per cent next week and possibly revive its bond-buying programme, spurred by plunging business and consumer morale since the June 23 vote.
A month after the Brexit vote, the latest signals of a sharp economic slowdown are likely to add to expectations of action from the Bank of England on August 4 when most economists say it will cut interest rates and might start buying bonds again.
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Interestingly, the Brexit Special had found a stark divide in consumer confidence between those who had voted In and those who voted Out – with consumer confidence some eight points lower for Remain supporters than Leave supporters. Forecasts point to the global vehicle market expanding once again to a new record in 2016, approaching 95m vehicles.
