The U.K. economy could face a "Wile E. Coyote moment" in coming months as investment and export demand growth fails to offset a decrease in consumer spending caused by falling wages, the government's official macroeconomic forecaster, Charlie Bean, has warned, according to the Financial Times.
Brexit negotiations will be a key determinant of the magnitude of the slowdown, Bean told a monetary policy forum in London.
"If it's smooth and orderly, that will help to support spending," he said. "But if it's disorderly, that could have adverse effects on consumer confidence."
So far, consumers have continued to spend despite falls in real income, but they could be about to realize that they have to cut spending as the financial ground falls away beneath them, Bean said, referring to the cartoon character Wile E. Coyote, who regularly found himself trying to keep moving forwards after inadvertently running off a cliff.
"Eventually they will realize [that their incomes have not continued growing] ... the crucial question is can other elements of spending [investment and net exports] take up the slack?"