Job security fears hamper rebound in UK consumer confidence

City workers walk towards St Paul's Cathedral as they cross the Millennium footbridge during sunrise in central London, Britain, January 14, 2016. REUTERS/Stefan Wermuth/File Photo

British consumer morale recovered slightly in September, but fears over job security when Brexit talks begin next year could yet dampen confidence, a survey published on Wednesday found.

Consumer confidence nosedived after Britain’s vote to leave the European Union on June 23, which many economists warned would catapult the country into recession. But morale recovered after early data showed the economy would avoid an immediate slump.

The YouGov/Centre for Economics and Business Research (Cebr) Consumer Confidence Index rose one point in September to 111.1, four points up from July but two points lower than before the Brexit vote.

The index, based on interviews with 6,000 people per month, showed measures of job security and household finances decreased and people were more pessimistic about business activity in their workplace over the year ahead.

This was balanced out by more positive expectations of household finances and house values over the coming year.

But the figures for job security over the next 12 months were the lowest since February and the second lowest in 20 months, YouGov said.

Formal exit talks with the EU are expected to start next year, when the impact of Brexit will become clearer.

Fears over this impact “will act as a handbrake on the post-referendum recovery in consumer confidence,” said Cebr director Scott Corfe.

Market research firm GfK is due to release its latest consumer confidence survey on Friday. Analysts polled by Reuters expected the index to rise to -5 from -7 in August and -12 in July, when it suffered its sharpest drop in over 26 years.

(Reporting by Peter Hobson)