Consumer confidence has seen its sharpest drop in 21 years after the UK vote to leave the EU, with travel one of the most vulnerable sectors, according to a new study.
Market research firm GfK conducted a one-off online survey of 2,000 people after the result was known.
Its confidence index fell by eight points to minus nine, a drop not since seen December 1994.
The Gfk research also suggested that 60% of consumers expect the general economic situation to worsen over the next year, compared with 46% in June. Just 20% expect it to improve, down from 27% last month.
“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,” said Joe Staton, head of market dynamics at GfK, told the BBC.
The survey also showed regional differences in the fall in confidence – with the north of England seeing a 19 point drop and Scotland seeing an 11 point drop. The south of England saw just a two point drop.
The number of people who believe prices will rise rapidly in the next 12 months jumped to 33% from 13% in June.
The poll was run from June 30 to July 5 to capture the mood of consumers immediately after the referendum on June 24.
Less confident consumers tend to curb their spending, which accounts for about two-thirds of the UK economy.
It is also one measure watched by the Bank of England when deciding its next move on interest rates.
The BDO’s monthly High Street Sales Tracker showed a strong start to June, with sales growing 3.8% year on year.
That decreased throughout the month and by the end of June, after the referendum, sales had fallen by 8.1% compared with last year.
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