7 in 10 think prices would rise and say they would change consumer behaviour if no deal is reached
A survey of 3,044 members of the British public commissioned by KPMG shows all demographic, employment and political groups believe a ‘No Deal’ Brexit is more likely than not (overall 54% said a ‘No Deal’ Brexit was likely and 20% said unlikely). The poll also reveals that a clear majority of UK respondents believe a 'No Deal' scenario would have a significant impact on their life: 70% think prices would rise and 69% say they would change their consumer behaviour. Also 45% believe a no-deal' scenario will be bad for the country compared with 25% who think it will be good. Despite these concerns about 'No Deal', the majority of voters have not changed their mind since the 2016 referendum. 89% of Leave voters said they would still vote leave and 93% of Remain voters said they would still vote remain.
Explaining the findings James Stewart, Head of Brexit at KPMG UK said:
“This survey shows the public expect a ‘no deal’ Brexit and plan to spend accordingly. The results reveal how people are anticipating substantial disruption in the short to medium-term, before they expect Brexit to have a more positive effect on the economy in the medium to long term. During this period of disruption Brits expect prices to go up, delays at airports and sea ports, plus a potential hit to the pound. The mood music of the Brexit talks is likely to have a direct effect on consumer confidence.”
In terms of behavioural change in the event of a ‘no deal’ Brexit:
· 43% of the public said they were very likely or likely to cut everyday spending.
· 45% of the public said they were very likely or likely to cut non-essential spending.
· 48% of the public said they were very likely or likely to cut luxury spending.
· 47% of the public said they were very likely or likely to delay major purchases.
The people most likely to alter their consumer behaviour in the event of 'No Deal' (from stockpiling food to cutting essential spending) are: those with concerns about prices rising as a consequence of 'No Deal', those under 35 and those who are female.
Explaining how these findings could affect the retail industry, Paul Martin, Head of Retail at KPMG UK said:
“Too few businesses have fully considered how consumer buying patterns may change if a no-deal scenario were to occur. We often find companies stockpiling inventory to mitigate potential customs delays without calculating how a squeeze on liquidity or a reduction in discretionary spend could affect their cashflow. Consumers, especially those of working age, are genuinely worried about price increases and travel delays and if no deal does become a reality we will see cutbacks on everything from the weekly shop, to handbags, holidays, cars and other major purchases.”
With Brexit bringing so much uncertainty, the British public are keen to hear more about what may lie ahead from several groups. Chief amongst them are small businesses, farmers, manufacturers, exporters and NHS staff. Leavers in particular also want to hear more from the fishing industry.
Notes to editors:
Detailed findings from KPMG’s poll:
· Voting groups are aligned on the likelihood of 'No Deal': similar majorities believe that 'No Deal' is likely regardless of voting intention, 2016 referendum vote, or current beliefs about Brexit.
· People are worried about the short-term impact of Brexit on the economy, but remain optimistic about its long-term impact:
How do you think Brexit will affect the UK’s economy over the following periods of time after we leave the EU?
*Note: potential rounding errors.
|Negative for the economy||Neither||Positive for the economy|
|A week after Brexit||49%||33%||18%|
|The year after we left||43%||27%||30%|
|Five to ten years after we leave||31%||24%||45%|
· Those who would cut their spending as a result of Brexit are more likely than average to want to hear from universities, airlines and retailers, not the UK government.
· In the event of no deal scenario the public think these things will happen
If the UK does not strike a deal with the EU, how likely do you believe any of the following are to occur?
*Note: potential rounding errors.
|EU Tariffs/Price rises||70%||22%||8%|
|Delays at UK channel ports||63%||27%||10%|
|Devaluation of the pound
|UK/EU travel difficulties||53%||28%||19%|
|Flight delays and cancellations||50%||31%||19%|
|Staff shortages i.e. in the NHS||51%||29%||20%|
|Job losses in the EU||46%||36%||18%|
|Job losses in the UK||46%||31%||23%|
|Shortages on the high
street i.e. clothes / other products
For further information or data tables please contact:
Paul Middleton, KPMG Corporate Communications
Tel: (0) 20 7694 2180 / Mobile: 0738 725 7543 / Email: Paul.Middleton@kpmg.co.uk
KPMG Press Office
Tel: +44 (0) 207 694 8773
About this survey:
Hanbury Strategy is a member of the British Polling Council and abides by its rules. 3,044 adult members of the British public were polled online by Hanbury Strategy on behalf of KPMG between 4th and 6th August 2018 using modelled data from smartphone applications to engage a nationally representative sample. Data is weighted to the profile of all adults aged 18+. Data weighted by gender, age and region. Targets for weighted data derived from Office for National Statistics (2016). For further details of survey methodology, please visit this link: https://hanburystrategycloud.filecloudonline.com/url/b5xagqwd42hsjdyj
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.