UK Consumer Confidence Slumps

Brits are increasingly pessimistic about the state of the country and getting less likely to splash their cash, according to new data.

Britain's consumer confidence sank 106.6 in November, down from 109.3 in October, according to an index produced by polling firm YouGov and the Center for Economics and Business Research, a consultancy, Business Insider reported.

The poll, seen by Reuters, recorded it's the first fall since June, although it remained above the 100 level that signals consumers are feeling confident. However, the slump puts the measure at its lowest level since the Brexit referendum in June 2016. All eight of the index's measures registered falls. The household finances score fell to its lowest level since January 2014.

CEBR economist Christian Jaccarini said the drop was linked to the Bank of England's recent interest rate hike and a slowdown in the housing market. "With these economic headwinds set to persist, and the Office for Budget Responsibility forecasting weaker growth, households are understandably worried," Jaccarini told Reuters.

The results will worry retailers and other businesses that rely on discretionary spending. John Lewis and Next are among those who have warned of deteriorating conditions on the High Street so far this year.

Warnings of a consumer slowdown are coming ahead of the crucial Christmas shopping period as the squeeze on incomes from inflation continues. Figures last week showed retail sales fell in October from a year earlier, the first decline in more than four years.

“Households are understandably worried.” said Jaccarini. “The first interest-rate hike in over a decade triggered fears that higher borrowing costs will compound the inflation-induced squeeze on household incomes.”

The survey was conducted between Nov. 1 and Nov. 21 and was based on responses from 5,673 people.