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UK consumer morale falls thanks to inflation

Staff Writer |
British consumer morale edged lower in February as rising inflation following last year's Brexit vote made householders warier about the outlook for their finances.

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The report by market research firm GfK pointed to increased financial pressure on households in the year ahead and added to signs that consumer spending - the driving force behind Britain's economy over the last few years - is starting to wilt as price pressures mount.

GfK's monthly consumer sentiment index edged down to -6 from -5 in January, in line with forecasts in a Reuters poll of economists. For a second month running, Britons became less enthusiastic about splashing out on major purchases.

"Any momentum behind the post-Brexit, debt-fuelled, consumer spending boom now appears to be softening," said Joe Staton, head of market dynamics at GfK.

The Bank of England forecasts household incomes will cease growing in inflation-adjusted terms later this year, and says it will keep a close eye on the extent to which households will seek to bridge the gap by borrowing more.

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