News & Politics

Brexit Fuels Record-Breaking Christmas Spending in Britain

When British voters were still trying to decide whether they should support or oppose Brexit, the “Remain” camp told them that doing so would result in a horrific economic collapse. Oh yes, the country’s economy would go down the drain. There was no stopping it. Brexit meant financial ruin.

Well, as it turns out, the opposite is actually happening:

This week is forecast to be the busiest yet for retailers as shoppers leave it to the last minute to buy presents.

Because Christmas Day falls on a Sunday this year, buyers have effectively been given an extra Saturday of spending on Christmas Eve, bumping up sales to unprecedented levels.

Cash withdrawals this month are at an all-time high and stores say they expect records to tumble.

Jace Tyrrell, chief executive of New West End Company, explains that the shopping spree is at least partially driven by the slightly weaker pound. Not only are British consumers trying to benefit from that, but so are foreigners who have chosen to do their shopping in London and Manchester rather than in a city in their own country.

He adds: “Christmas trading is expected to hit a record-breaking £2.34billion as a result.”

So old records are being smashed, and that’s not despite Brexit but because of it. Retail Economics recently published a poll that found that 82 percent of Brits said they would not change their spending habits. Only 16 percent said they would be slightly more “cautious” than in the past. The Christmas spending shows that this poll might have underestimated Brits’ optimism; they’re not only “not adjusting,” they’re spending more than ever.

Retail Economics’ Richard Lim explains:

Shoppers have embraced a ‘keep calm and carry on spending’ attitude, seemingly unfazed by the Brexit vote and undeterred by the economic doom-mongers.

Recessions are often caused by a combination of actual economic problems and a change in people’s psychology and expectations. To put it differently, when consumers think hard times are coming and change their spending habits accordingly, it all becomes one big self-fulfilling prophecy. On the other hand, if they continue to spend as usual even though there really are some serious economic issues, they often succeed in limiting the damage. If Brits hang in there and continue to live and spend as they did before, they’ll be just fine.

Clearly that’s exactly what they’re doing. As the former director-general of the British Chamber of Commerce, John Longworth, explains:

If you want to know how well the economy is doing look at consumer spending, which is a much bigger vote of confidence than any opinion poll.

The doom-and-gloom predictions of the “Remain” camp were nothing more than scaremongering.