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Biggest Drop in UK Consumer Morale Since 1990 Puts BoE on Track to Act

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British consumer morale suffered its sharpest drop in more than 26 years after last month’s decision by voters to leave the European Union, according to figures that are likely to embolden Bank of England policymakers to take action next week.

Market research firm GfK said its gauge of consumer confidence fell to -12 from -1 in June, the biggest drop since March 1990 – when Margaret Thatcher was prime minister and Britons were reeling from interest rates rising to 15 percent.

The comparison ends there, however. Economists expect the Bank to cut rates to a new low of 0.25 percent next week and possibly revive its bond-buying programme, spurred by plunging business and consumer morale since the June 23 vote.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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