U.K. consumer confidence slipped to a four-year low in December and risks weakening further in 2018, according to a report Thursday.
GfK said its key index fell by one point to minus 13, the lowest since December 2013 and below the level reached in the aftermath of the Brexit vote last year. Households declared themselves deeply pessimistic about the economic situation and less willing to make major purchases than at any time since 2014.
The findings are a blow to retailers facing a make-or-break Christmas shopping season as the squeeze from faster inflation, Brexit uncertainty and the Bank of England’s November interest-rate increase take their toll. GfK hasn’t recorded a positive index reading since January 2016.
“We need to see several issues move on before the downward trend of the consumer mood changes,” said Joe Staton, head of market dynamics at GfK. “We need to have a better sense of how Brexit will pan out, and also of how quickly and how far interest rates will rise. But none of this will be resolved quickly so there’s every likelihood that 2018 will take us lower.”