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Brexit vote dampens UK spending

Monday, July 11, 2016 - 01:38

British consumer spending fell last month, the business outlook darkened by the most in four years and economic activity in London slowed sharply, according to three reports which showed the vote to leave the European Union starting to take a toll. Hayley Platt reports

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Briton's love affair with shopping is well documented. But fears about Brexit have taken their toll on consumer spending. Figures from Visa showed a 0.5 percent monthly fall in June - the second in a row. They followed a similar GfK survey last week. (SOUNDBITE) (English) CITY INDEX, MARKET ANALYST, KEN ODELUNG, SAYING: "GfK's data showed the biggest drop in UK consumer confidence in its measures for about 20 years and Visa saying that a 1.4 percent rise in the 3 months to June was the weakest advance since 2014 so added to what we already know about the increasingly cautious consumer these are not promising." Markit's survey showing the economic outlook for businesses was also at its least positive in four years, largely because of the referendum. Many now expect Bank of England governor Mark Carney to cut rates - already at record lows of half a percent - still further. And possibly as early as Thursday. (SOUNDBITE) (English) CITY INDEX, MARKET ANALYST, KEN ODELUNG, SAYING: "We're in a situation that requires such a move. I do think that on the whole that it suggests that we are going to get a cut of at lease 25 basis points." Visa said consumers were cutting back on discretionary spending, such as hotels, restaurants and bars, as well as new cars and foreign travel. And it expects spending to be "muted at best" for the rest of the year. London, where a majority of voters favoured staying in the EU, looks set to take a particularly big hit. Lloyds Bank's monthly survey showed the capital last month suffered its biggest contraction since the depths of the financial crisis in April 2009.

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Brexit vote dampens UK spending

Monday, July 11, 2016 - 01:38