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Consumer confidence takes dive following Brexit vote

Consumer confidence suffered the sharpest drop in 21 years in the wake of the UK's vote to leave the European Union, according to new research.

A special Consumer Confidence Barometer from GfK found the core index had fallen by eight points to minus nine, the biggest dip since December 1994.

Among those who said they had voted in the referendum on 23 June, confidence dropped to minus 13 points for the Remain camp, while Leavers were more optimistic - although still in negative territory - at minus five.

All key measures used to calculate the core index fell.

Six out of 10 consumers expected the general economic situation to worsen in the next 12 months, up from 46 per cent in June. Only 20 per cent predicted it would improve, down from 27 per cent last month.

Meanwhile, the proportion of people who believe prices will increase rapidly in the next year jumped by 20 percentage points from 13 per cent to 33 per cent.

GfK said there were distinct regional differences in how the result affected consumer sentiment. In the North of England, confidence plunged 19 points, while in Scotland it fell by 11 points. However, in the South, including London, there was only a two-point fall.

Confidence dropped sharply among 16 to 29-year-olds, although they remained the most optimistic age group overall.

The biggest drop in confidence from an income perspective was among households earning £25,000-£49,999, with a fall of 16 points.

Joe Staton, head of market dynamics at GfK, said: "During this period of uncertainty, we've seen a very significant drop in confidence, as is clear from the fact that every one of our key measures has fallen, with the biggest decrease occurring in the outlook for the general economic situation in the next 12 months.

"Our analysis suggests that in the immediate aftermath of the referendum, sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending. As we've learnt from previous periods of uncertainty, consumers turn to well-known brands they love and trust as a guarantee of quality and value for money. Now is the time for companies to understand and respond to consumer concerns by anticipating and meeting their needs."

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