The UK economy has become the nation’s biggest concern, despite British consumer spending confidence reaching a new high, according to research from Nielsen.
Nielsen’s Global Survey of Consumer Confidence and Spending Intentions revealed that the economy saw the biggest rise in Britons citing it as their first or second biggest concern, rising 12 percentage points to 28%, amid political and economic planning for Brexit.
The report found that political stability saw the next biggest rise, jumping eight points to 10%, five times higher than at the end of 2015. Some 15% cited rising food prices as their biggest concern, up 2%.
However, the proportion of Britons positive about making purchases was at his highest level on record (53%) at the end of 2016, while the proportion of Britons switching to cheaper grocery brands to save money was at its second-lowest level on record (22%).
Overall the British Consumer Confidence Index finished 2016 at its highest level since the study began in 2005, at 102, one point higher than a year earlier and much higher than the European average of 81. The UK was Europe’s fourth most confident country behind Denmark, the Czech Republic and Switzerland.
Steve Smith, managing director, Nielsen UK and Ireland, said: “In the last quarter, we’ve seen the first signs of rising inflation in the UK. Rising petrol prices being a primary example, seeing the third biggest jump in consumer concern. We now expect to see the start of price increases for consumer staples early this year and maybe cases of ‘shrinkflation’ as the industry looks to minimise the price increases being passed on to shoppers.
“However times generally remain good for British consumers, with strong employment and wage growth that rose slightly ahead of price inflation during the last year. In addition, disposable income remains stable, while tax benefits for the lower paid and a rise in the minimum wage have reduced income inequality. As a result, consumer spend continued to be the engine of UK GDP growth in 2016.”