UK consumer confidence fell by one percentage point in the first quarter of 2017, according to the latest Consumer Tracker report from Deloitte, the business advisory firm.
The quarterly survey of 3,000 UK consumers, which was carried out between 17 March and 20 March 2017, saw overall consumer confidence fall to -7% in Q1 2017, down one percentage point from the previous quarter. Despite the quarterly fall in overall confidence, it remains broadly in line with the three-year average.
Significantly, four out of the six measures which make up the confidence index have seen negative movements in Q1 2017, with inflation rising and discretionary spending falling. In particular, consumer confidence in disposable income fell by three percentage points to -17% this quarter, its lowest level in more than two years.
Ian Stewart, chief economist at Deloitte, said: “Since last summer’s EU referendum consumer spending has held up well, but with inflation rising and nominal wage growth starting to slow, consumers are beginning to feel a squeeze on their disposable income.
“In March, the rate of inflation stood at 2.3%, above the Bank of England’s 2% target and the highest in more than two years. There are already some signs that these pressures are contributing to a slowdown in consumer activity.
“Record levels of employment and low interest rates should help the UK avoid a sharp drop in consumer spending.”