Nearly a third of British consumers have cut their spending because of Brexit, scrimping on luxuries and postponing investments amid doubt over the future of the UK’s relationship with the EU bloc.
A survey of 4,015 Brits, conducted by professional services firm KPMG, found 31 per cent had already cut their spending.
James Stewart, KPMG UK’s head of Brexit, said: “Consumers have long felt gloomy about Brexit, but now we’re seeing people act on those emotions.”
The survey found a widespread belief that certain products will become more expensive if Britain crashes out without a deal, with around two-thirds saying they thought the prices of wine, spirits, steak, fruit and vegetables would rise.
“Brexit is often presented as if it will happen at our ports and in the City,” said Stewart. “In reality, some of the biggest effects will be felt in our shops, cafes, travel agents and garage forecourts. More businesses need to prepare for turbulence and also be ready to capitalise on any spike in consumer confidence a good deal unleashes.”
Nearly half the respondents (45 per cent) said they felt leaving the EU without a deal would be bad for the country, with less than a quarter thinking it would be good. Only one in ten thought there would be no economic disruption as Britain exits the bloc.
Linda Ellett, KPMG’s UK head of corporate markets, said “a lean Christmas could lie ahead” for public-facing companies. “Consumer businesses must adapt to continue to attract spending consumers, otherwise they’ll encounter a severe Christmas hangover,” she said.
News of growing doubts will add to headaches among retailers. Data released yesterday showed UK consumer spending dipped in October after having risen for two months, with an e-commerce rebound propping up a two per cent fall in face-to-face sales.
According to Visa UK Consumer Spending Index data compiled by IHS Markit, expenditure has fallen in six of ten full months so far this year, adding to a cocktail of concerns for bricks-and-mortar stores.
Spending on clothing and footwear fell during the month, with only slight gains felt across food and hospitality sectors – failing to build on positive summer results that have pinned on hot weather and the football world cup. Consumers also spent less on recreation, culture, transport and communication.