LONDON: Consumer confidence in the UK has dropped markedly following an indecisive general election result that left the country saddled with a hung parliament, a new survey has revealed.
Coupled with rising inflation, sluggish wage growth and evidence of a slowdown in the housing market, the poll by research firm YouGov and the Centre for Economics and Business Research (CEBR) showed a "profound collapse" in confidence following the election.
The YouGov/CEBR Consumer Confidence Index, which is based on 6,000 interviews conducted each month, stood at 109.1 in the week before the vote on June 8th, but it dropped to 105.2 in the period from then to June 21st.
YouGov said the extent of the fall in consumer confidence compared with the plunge that followed last year's Brexit vote, when the index dropped from 111.9 in the weeks before the referendum to 104.3 in the days after it, the Guardian reported.
And looking at the figures for June as a whole, combining both pre- and post-election data, the index stood at 106.9, its second-lowest level since the summer of 2013. The only time it was worse was just after last year’s Brexit vote.
Commenting on the findings, Stephen Harmston, Head of YouGov, said: "Consumer confidence has been generally ticking downward since last autumn but the events of the past month have placed it under greater pressure.
"The hung parliament seems to have further dampened consumers' spirits, which were already sinking following the continued squeeze on household finances.
"But the real cause for alarm will be the cooling of the property market as this is one of the key things that has propped up consumer confidence over the past few years."
Douglas McWilliams, the CEBR's Deputy Chairman, added: "It looks as though the indecisive result of the election has seriously affected economic prospects already dampened by Brexit uncertainty.
"The data shows a sharp drop in consumers' confidence about their own financial situation and even more so about house prices. This will affect spending in the high street, in shopping centres and online."
However, on a more positive note, it should be noted that an index score above 100 still represents "positive" territory.
And YouGov and the CEBR also found that the index measures for job security and business activity, both for the last 30 days and the next 12 months, were "proving relatively resilient".
Data sourced from YouGov/CEBR, Guardian; additional content by WARC staff