Brexit sees UK consumer spending hit two-year low

THE number of UK consumers cutting down on household spending is at the highest level for two years as consumer confidence continues to plummet following the Brexit vote.

More than half of people across the UK admitted to resorting to cost-cutting measures in the second quarter of 2017, according to Nielsen’s latest Global Survey of Consumer Confidence and Spending Intentions.

The collapse in sterling following UK’s decision to quit the EU resulted in inflation soaring to its highest level for nearly four years in May at 2.9%, before easing back to 2.6% in recent months.

Wage growth, meanwhile, has not kept up pace, meaning consumers have less to spend on daily essentials.

The figures mark a contrast to when household money-saving activity hit its lowest level on record a year ago, when only 40% were saving the pennies.

To compound matters, the index Nielsen said that consumer confidence had collapsed.

Immediately before the vote the UK was the second most confident country in Europe, behind only Denmark, but now it has slipped to ninth place.

The worries about the economy are so severe that nearly half the population thinks the country is going through a recession.

“A variety of factors has contributed to people tightening their purse-strings,” said Steve Smith, managing director at Nielsen UK and Ireland.

“The pound’s weakness against both the dollar and the euro is finally feeding through to shop prices, which means real inflation is running at over 2.5%,” he added.