U.K. Consumers Shake Off Brexit as Economic Optimism Surges
U.K. consumers appear to be shrugging off some initial Brexit concerns as their worst fears about the economy are allayed.
GfK said Friday that its confidence index increased 6 points to minus 1 in September, regaining the ground lost after the vote to leave the European Union in June. Households’ expectations for their personal finances improved, as did the outlook for the economy. That measure jumped 13 points to the second highest this year.
“Wages continue to grow faster than prices, rising employment boosts income and low interest rates encourage people to spend rather than save,” said Joe Staton, head of market dynamics at GfK.
Nevertheless, Staton cautioned that there are still risks that could undermine sentiment.
“Will confidence continue to rise?” he said. “Or are we seeing misplaced consumer optimism in which any kind of bad news -- economic or political -- sends the index reeling once again?”
The rise in consumer strength is being mirrored in a brighter outlook among executives. Lloyds Bank said its business barometer increased 8 points to 24 in September, though it’s still below the long-term average of 32. There was a significant increase in economic optimism, pushing that gauge to a post-referendum high, it said.
The view was tempered by a “more subdued reading” for companies’ own prospects, according to LLoyds.
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