PwC: Scots increasingly pessimistic over personal finances as Brexit nears

Lindsay Gardiner

Three-quarters of Scots believe Brexit will increase the cost of living, according to new research by PwC, which also found that the number of Scots who believe they will be better off over the coming year has fallen.

PwC’s latest Consumer Sentiment survey shows that more than a third of Scots have seen their spending habits impacted by Brexit.

This is leading to reduced spend on the likes of holidays, home improvements and fashion, while consumers also expect to spend more on groceries compared with last year.

One third of Scots (32 per cent) expect to be worse off in 12 months’ time, with 20 per cent saying they would be better off. This balance of -13 percentage points, when rounding is factored in, has widened by four points from -9pp in December.

The average balance across 12 nations and regions of the UK is +1 per cent, up from -3 per cent in December, meaning overall, more people believe they will be better off this year. Wales and London were the most optimistic areas while only Northern Ireland was behind Scotland, on -18 per cent.

The survey found that a quarter (24 per cent) of Scots said the way they spend and save money has changed in the last 12 months directly because of Brexit, while a further 11 per cent believe their spending habits will change over the next 12 months.

The remaining 65 per cent said their spending habits had not changed, and would not change.

The Consumer Sentiment survey also examines spending intentions across 13 key consumer categories. The survey found it is more expensive purchases which will see the greatest impact from spending reductions.

More than a quarter (27 per cent) expect to spend less on holidays, the same number who highlighted a reduction in fashion and technology purchases. A similar number (27 per cent) said they expected to spend more on groceries.

Lindsay Gardiner, PwC Scotland Chairman, said: “Three years after the EU referendum, Brexit continues to be the defining influence on consumer sentiment and the ongoing economic uncertainty that Brexit has created is the most likely cause of the reduction in the number of Scots who expect to be better off in 2019.

“The results show that concern about Brexit seems to be more keenly felt in Scotland with 74 per cent of respondents expecting prices in general to rise over the next 12 months due to the Brexit effect – against a national average of 62 per cent.”

“With fashion retailers and travel agents among those bracing themselves for reduced spending, we can expect an even more challenging environment on the high street over the next 12 months.”