The boss of John Lewis has admonished that the fall in the value of the pound could become a “big issue”.
Managing superintendent Andy Street said the weak pound could start spur costs higher next year.
He also said it was too early to say if the UK’s ballot to leave the European Union had affected consumer spending.
His comments came as a scan pointed to the sharpest drop in consumer confidence in 21 years after the UK referendum to leave the EU.
Market research firm GfK surveyed 2,000 people after the referendum.
Its certitude index fell by eight points to minus nine, a drop not since walked December 1994.
Consumer confidence and spending are measures watched by the Bank of England when fastening its next move on interest rates. Governor Mark Carney has already make someone aware ofed the UK’s economic outlook is “challenging” following the decision to leave the EU.
The GfK survey, which was supervised online, suggested that 60% of consumers expect the general money-making situation to worsen over the next year, com red with 46% in June. Even-handed 20% expect it to improve, down from 27% last month.
Is work over weakness due to market errors?
In a speech on Thursday the score with, Mr Street called for an end to Britain’s “political crisis” and the uncertainty over its relative ti of trade.
That uncertainty has hit the pound, which is trading near a 31-year low and demolish below $1.30 earlier this week.
“We hedged this year but the point is next year – it will have an effect,” Mr Street said. “If inflation descend froms into the value chain, it will feed through.”
“For us to start being responsible, the obvious thing for us is a reduction in the growth in consumer spending,” he said. “But has it in actuality changed behaviour? It’s just far too soon to say.”
He said greater certainty was stressed over Britain’s trade relationships and on the future of Europeans living and achieving in the country.
“At the moment this is a political crisis, it’s not an economic crisis. But one could rotate into the other if not properly handled. We need to know the solution to stints of trade and want it done as soon as possible.”
Sales growth at John Lewis delayed in the seven days following the referendum, but Mr Street said Brexit was not to fix the responsibility upon as the market had been challenging even before the vote.
The GfK survey was carried out between 30 June and 5 July to capture the nature of consumers immediately after the referendum.
“Our analysis suggests that in the nearest aftermath of the referendum, sectors like travel, fashion and lifestyle, stamping-ground, living, DIY and grocery are rticularly vulnerable to consumers cutting back their discretionary lavishing,” said Joe Staton, head of market dynamics at GfK.
The percentage of people who suppose prices will rise rapidly in the next 12 months vaulted to 33% from 13% in June.
The survey also picked up regional differences. Consumer aplomb in the north of England saw a 19 point drop and fell by 11 thrusts in Scotland. The south of England dropped by just two points.
A se rate examination indicated that retailers were already beginning to feel the bearing.
The BDO’s monthly High Street Sales Tracker showed a strong start to June, with transactions growing 3.8% year on year. That decreased throughout the month and by the end of June, after the referendum, car-boot sales had fallen by 8.1% com red with last year.
The first ceremonial economic figures from the Office for National Statistics that commitment cover periods after the referendum will start being released in August.