461 views

Economists are expecting more positive data on consumer confidence this week as shoppers shrug off the Brexit vote

Helen Cahill
Follow Helen
BRITAIN-EU-POLITICS-VOTE-BREXIT
The data will give Brexiters something to celebrate (Source: Getty)

Consumers' worries about the economic impact of the Brexit vote are fading, as economists are expecting positive data on sentiment to be released this week.

Confidence in the UK economy slumped immediately after the EU referendum, but now economists are expecting an uptick.

Read more: West End gets Brexit boost as sales to tip over £9bn for the first time

Analysts at IHS Global Insight are predicting the widely-followed GfK consumer confidence index to rise to minus five in September, improving on minus seven in August. In July, the consumer confidence index plunged to minus 12, the sharpest monthly decline since March 1990. The month-on-month drop left the index at its lowest level since December 2013.

In June and May, before the Brexit vote, the gauge of consumer sentiment was at minus one.

The predictions come after retail sales data from July showed that UK consumers were still happy to spend this summer. The fall in the value of the pound has given a boost to the West End's retail sales in particular, as tourists flock to the capital. This year, sales in London's premiere shopping district are set to tip over £9bn for the first time.

Read more: After strong July retail sales, did the Bank jump the gun by cutting rates?

Howard Archer, chief UK economist at IHS Global Insight, said: "We expect consumer confidence to have improved slightly further in September due to concerns of the economy’s recent performance being diluted by evidence that it has so far proved resilient following the Brexit vote (significantly helped by consumers keeping on spending).

"Certainly, in August, consumers views of the economic outlook and the economy’s recent performance rebounded appreciably.

"However, we suspect that consumers will still be pretty wary of the outlook for the economy over the coming 12 months, with uncertainties likely to be magnified by the triggering of Article 50 in the early months of 2017."

Related articles