Market analysis: Has Brexit had an effect on optics?

The United Kingdom’s EU referendum, the subsequent resignation of the Prime Minister, and the political turmoil stemming from both have resulted in a sharp decline in consumer confidence and economic sentiment, as measured by the GfK Consumer Confidence Index.

A Brexit-edition of the survey was conducted as a one-off special from June 30 to July 5 in order to capture the mood of consumers immediately after the referendum decision on June 24. The results show a significant decline in confidence with the overall index score dropping by eight points from the regular survey of June 16 to a level of minus nine. Interestingly, respondents’ confidence in their personal economic situations seem to have been less affected, with results down six points since June 16 to a level of plus two. Meanwhile, confidence in the wider general economic situation has been impacted more significantly, with the index score here down by a massive 15 points to a level of -29. Sixty percent of respondents now report that they expect the general economic situation to worsen over the next 12 months.