Britons are cutting back on their daily coffee fix and hesitating before splashing out on bigger items such as new carpets, retailers said on Tuesday, further signs that consumer spending is slowing sharply ahead of a national election in June. David Pollard reports.
Think Britain. You might think tea, beer & Brexit. But the UK also drinks nearly one cup of coffee for every man, woman and child there - per day. Increasingly, though, the Brexit battered pound is leaving a nasty aftertaste. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "It's very difficult the fact of greater imported inflation via a weaker currency .... And in the absence of wage rises the consumer, the shopper, is going to take a second look and decide it's going to keep its purses shut." That thought knocking the froth off UK high-street chain Costa Coffee. Shares in owner Whitbread punished after it spoke of declining sales - and declining UK consumer confidence. Carpetright saw its shares beaten down 15 per cent after a similar message. Both further evidence that consumer spending is slowing sharply - ahead of a national election in June. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "Why has the UK economy not suffered the immediate recession forecast post-referendum? It was basically the vast majority of UK households didn't believe in Project Fear." Could Project Fear - as pro-Brexiteers dubbed forecasts of a downturn - yet prove correct? The latest retail sales numbers already show the biggest quarterly fall in seven years. Food prices rising at their fastest in three years. And further out - if no Brexit deal is struck with the EU - the possibility of tariffs. As high as 46 per cent on Italian mozzarella - even 40 for Irish cheddar - according to the British Retail Consortium. Though just four per cent extra's expected on French wine. One reason perhaps for Britain to turn to drink of a different kind, instead.