Consumer confidence 'collapses' after general election

Consumer confidence "has collapsed" following the general election this month, says The Independent.

From measuring 109.1 in the week before voters went to the polls, confidence slumped to 105.2 immediately following the result, according to a survey from YouGov and the Centre of Economics and Buyout Research (CEBR).

A similar drop was experienced after vote for Brexit last year, when an index of 111.9 dropped to 104.3 after.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Usually, consumer confidence changes by fractions of a percent.

Both these drops came either side of an vote that had the potential to bring about prolonged uncertainty and while the Tories have now secured a "supply and confidence" arrangement with the Democratic Unionist Party, Theresa May remains under intense pressure and her government is still precarious.

Today also saw researcher Kantar Worldpanel publish the fastest rate of grocery sales growth in five years, says the Daily Telegraph.

Sales rose five per cent for the 12 weeks to 18 June year-on-year, with rises of 3.5 and 3.7 per cent for "big four" supermarkets Tesco and Morrisons.

However, much of that increase merely reflects price rises as a result of the post-Brexit vote slump in the pound, which has send inflation soaring to three per cent.

With inflation running well ahead of pay growth, real wages are in decline, hitting consumer spending on the likes of clothing, which has been falling in recent months.

Nevertheless, it isn't all doom and gloom: any reading from YouGov above 100 means more consumers are more confident than not.

Much of consumer confidence is based on house prices and they remain in broadly positive territory, says the Independent. Elsewhere, manufacturing is benefitting from the fall in sterling and seeing orders at a 30-year high.

Consequently, while economic growth slumped from 0.7 per cent to 0.2 per cent in the first quarter, analysts continue to believe GDP will move positively this year.