Brexit and consumer confidence

Wed 4 January 2023 - 2 minute read

 

Since the UK formally left the European Union and completed the Brexit transition period in 2020, the economy has continued to grow unevenly through a period shaped by the COVID-19 pandemic, global supply chain disruption, and a sharp rise in inflation during 2022–2023. Despite these pressures, much of the media and policy debate has continued to focus on long-term Brexit impacts, often forecasting weaker productivity growth, higher trade friction, and sustained pressure on living standards. However, this broader narrative does not always reflect the priorities of consumers themselves.

Brexit and the public agenda

By 2023, Brexit had largely faded from the list of top day-to-day concerns for many UK households. More immediate issues tend to dominate public attention, particularly the cost of living crisis, NHS waiting times, energy prices, housing affordability, and broader economic stability. In most consumer surveys, Brexit typically ranks well below these pressures, reflecting a shift from constitutional debate to practical financial concerns.

Consumer confidence under pressure

Consumer confidence remains a key indicator of economic health, given the UK’s reliance on household spending to drive growth. In 2023, confidence levels were heavily influenced by high inflation, rising interest rates, and subdued real wage growth. These factors have had a more direct impact on spending behaviour than Brexit itself, shaping decisions about saving, discretionary purchases, and borrowing.

While confidence has fluctuated month to month, the overall picture has been one of caution rather than collapse. Households have generally remained resilient in essential spending, but more sensitive to price increases and economic uncertainty than in the pre-pandemic period.

A more complex set of drivers

By this point, consumer sentiment is shaped by a wide range of factors including inflation expectations, mortgage and rent costs, job security, energy bills, and broader geopolitical uncertainty. Brexit still plays a background role in business and trade conditions, but it is no longer the dominant psychological driver of household confidence.

Recent analysis of consumer attitudes also continues to show political and generational variation in economic outlook. Some groups remain more pessimistic about the UK’s long-term growth prospects, while others are more optimistic or focused on short-term financial pressures. However, unlike the immediate post-referendum period, these differences are now more strongly influenced by inflation and living costs than by Brexit itself.

Overall picture

In summary, the 2023 consumer landscape is defined less by Brexit and more by cost-of-living pressures and post-pandemic economic adjustment. While earlier debates centred on the referendum’s long-term economic consequences, current consumer sentiment is shaped primarily by everyday financial realities. The result is a public mood that is cautious and financially constrained, but not solely defined by Brexit in the way it once was. 

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