Consumer confidence rose to pre-Brexit levels in September, according to GfK’s latest index. While the core consumer confidence index remains negative, it rose a further six points this month to -1.
British consumers’ propensity to make major purchases also rose two points in September to +9, continuing August’s positive momentum.
And the index measuring consumers’ feelings towards their personal finances over the next 12 months rose three points in September to 7; this is one point higher than September 2015.
Joe Staton, head of market dynamics at GfK, said the doomsday scenario many analysts predicted post-Brexit simply hasn’t happened.
“Think back to the morning of June 24th this summer when the EU Referendum results were in and the world was coming to terms with the UK seemingly turning its back on Europe,” he said.
“We watched as David Cameron resigned as prime minister, sterling plunged, the stock market had a rollercoaster ride and the issue of Scottish independence resurfaced. Did it all really happen? Judging from the mood of consumers as measured by the latest Consumer Confidence Barometer, you could be forgiven for thinking that it was all a bad a dream”.
Staton believes consumers had adjusted to a “new reality”. He explained: “Yes we are still lower by most measures than a year ago. But we have rebounded from the shock many of us felt on 24 June and in the days that followed.
“The recovery in the Overall Index Score to pre-Brexit levels means consumers are clearly telling us they have adjusted to the new reality.”
However, post-Brexit optimism should be taken with a pinch of salt, with Theresa May’s government still unclear about how far along they are in negotiations about leaving the EU and issues such as the UK’s access to the single market far from resolved.
Earlier this week, it was revealed Brexit had contributed to UK mortgage approvals falling to their lowest level since November 2014, while the Bank of England has claimed Brexit will contribute to a “challenging period of uncertainty and adjustment” for the British economy.