Car and holiday sales held back by Brexit uncertainty, says report

(c) Sky News 2019: <a href="http://news.sky.com/story/car-and-holiday-sales-held-back-by-brexit-uncertainty-report-11669267">Car and holiday sales held back by Brexit uncertainty, says report</a>
 

Consumers are holding back on big-ticket purchases such as cars and holidays amid Brexit uncertainty, according to a monthly survey.

The IHS Markit household finance index, which measures overall perceptions of financial wellbeing, gave a reading of 43.3 for March - slightly down on the month before, and a 13-month low.

It came as separate figures from the British Chambers of Commerce (BCC) suggested that business investment was set for its biggest decline in a decade this year as firms "hit the brakes".

The household finance survey found that consumer appetite for major purchases declined this month at the fastest pace since September 2017.

However the figures showed that concerns about job security and the outlook for financial wellbeing had "moderated" though remaining more widespread than in 2018.

Tim Moore, associate director at IHS Markit, said: "A sharp drop in UK households' appetite for major purchases was the main signal that Brexit uncertainty had some impact on consumer spending.

"This index was close to a five-year low, which may reflect a wait-and-see approach to holiday bookings and other big-ticket spending commitments during the latest survey period."

Latest car industry data showed sales climbed in February, though that followed five months of decline.

Meanwhile, holiday giants Thomas Cook and TUI last month pointed to turbulence in the UK market.

Meanwhile, the BCC downgraded its UK growth forecast for this year from 1.3% to 1.2%, blaming a weaker outlook for business investment and trade amid Brexit uncertainty as well as weaker expected global growth.

The BCC is one of a number of business groups that have expressed dismay at the continued failure of Parliament to resolve divisions over Brexit.

Its forecast pointed to a 1% decline in business investment, which it said would be the worst decline since 2009.

Adam Marshall, director general of the BCC, said: "It is clear that political inaction has already had economic consequences, with many firms hitting the brakes on investment and recruitment decisions as a result of ongoing uncertainty.

"Worse still, some companies have moved investment and growth plans as part of their contingency preparations.

"Some of this investment may never come back to the UK."