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Brexit may be giving Brits the jitters

News, 31 March 2016

LONDON: There has been an 18-point year-on-year fall in UK consumer sentiment regarding future prospects for the general economy, according to a new survey that questions whether this is connected to concerns about the EU referendum in June.

In its latest consumer confidence index, research firm GfK reported that the UK measure for the general economic situation over the next 12 months stood at -12 in March compared to +6 in March 2015.

Yet at the same time, at least three of its other measures remained in positive territory, leading GfK to wonder whether the prospect of "Brexit" is unnerving British consumers, who for more than a month have been receiving conflicting messages from "remain" and "leave" campaigners.

"Are we seeing Brexit jitters at work now?" asked Joe Staton, head of market dynamics at GfK. "Looking at how consumers see the wider economy developing over the next 12 months, we are 18 points lower this month than in March 2015," he said.

"So, despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing Eurozone crisis appear to be hitting home."

Aside from the downbeat outlook for the general economy over the coming year, UK consumers believe their personal financial situation will improve over the next 12 months.

This particular measure increased one point to +9 since February while the GfK's overall index score remained unchanged at zero.

Meanwhile, GfK's major purchase index decreased one point this month to +11, or two points higher than the same time last year. In addition, its savings index, which is not used in the overall index score, stood at -2, or four points higher than last year.

With British voters due to vote on June 23 on whether to stay within the European Union or not, debate about the implications for the UK economy has been swinging back and forth – and marketers have not been excluded.

According to a poll of 278 senior marketers conducted in February by Mailjet, an email marketing firm, almost a third (31.3%) agreed that the UK exiting the EU would be good for their company while 41.7% disagreed and 27% said they were unsure.

Data sourced from GfK, The Drum; additional content by Warc staff