LONDON, The United States – British families are holding back despite the robust job market and pay salaries. With economic uncertainty related to Brexit, consumer confidence appears to have been shaken.
The real estate market of the Kingdom also prepares for a possible liquidation in the case of a “tough Brexit” after several months of falling house prices.
According to the Office of National Statistics (ONS), UK household spending fell by 0.9% in December. Consumers restricting purchases immediately after the Black Friday sales season in November.
Analysts say the downtrend probably extended through January and could hurt the GDP growth rate for the first quarter of 2019. Most consumer-related sectors, with a notable exception for food and gasoline, saw losses in December, ONS said.
Separately, the British Retail Consortium said Christmas purchases in the past were the slowest for retailers since the 2008 crisis.
Experts say that this is not necessarily a disastrous outcome, as soaring housing prices, boosted by overwhelming foreign demand, have hindered the quality of life of ordinary Britons for years, particularly in London.
The solid job market and rising wages coupled with a projected drop in housing value could solve part of the accessibility crisis, but the real estate industry could suffer a major blow and lose thousands of jobs across the country.
Meanwhile, even British supermarket chains, including Morrisons and Sainsbury’s, posted weak sales in December. However, Tesco surpassed expectations due to its low prices and a wide selection of products, while consumer demand at Next rose at the end of the month.
With the deal negotiated with Brussels strongly rejected in Parliament, Prime Minister Theresa May’s cabinet dismissed the possibility of a second referendum to review Brexit’s situation, saying that the results of the June 2016 vote are irreversible and reaffirming the government to leave the EU on March 29.