Brexit prompts consumer confidence crash as recession fears loom

Economic sentiment has plummeted seven points, from 111.9 to 104.3, in the four days following the Brexit result to its lowest level in more than three years.

Scott Corfe, director at the Centre for Economics and Business Research said: “Brexit could lead to a marked slowdown in the economy over the coming months.

“Households are highly spooked by recent developments, which we expect to filter through into a much weaker environment for retail sales and household spending - particularly on big ticket items. A recession certainly cannot be ruled out at this point.”

YouGov experts expect a further decline in sentiment. Stephen Harmston, head of YouGov Reports said: “Consumer confidence has collapsed since the vote to leave the EU. Four days of uncertainty has wiped out the gains made over the last three years.

“It has not yet reached the depths of the financial crisis in 2008 but we expect it to decline further as some of the consequences of Brexit kick-in. The only questions now is will it slump to the levels it reached eight years ago or will it pull itself out of this dive?”

Meanwhile GfK’s long-running Consumer Confidence Index, which was collated before the Brexit result, showed sentiment was already in negative territory at -1.

Joe Staton, head of market dynamics at GfK, said: “One trend that continued in the run up to the referendum is a deepening pessimism over the general economic situation. As we approached voting day, this was already 18 points lower than in June 2015 and it’s almost certain we’ll see this worsening when next month’s results are in.”

Two of the five measures used to calculate the Index – personal financial situation over the last 12 months and over the next 12 months – showed increases.

However, Stanton warned this was likely to change following the referendum.

“In these extraordinary consumer circumstances, all bets are off until we all know more.

”We can expect plenty of volatility in consumer confidence at least until Brexit negotiations are underway. The longer term mood will then depend on how smoothly those negotiations go,” he said.