Income from employment in UK rises at survey-record pace in June
However, looking at the second quarter of 2018 as a whole, the headline index was higher than that seen on average throughout the first quarter of the year (43.9, against 42.8 in Q1 2018).
Stubbornly high inflation was a key factor holding back household sentiment in June, with survey respondents recording the strongest increase in living costs for three months.
Rising living costs were partly offset by greater wages, with household signalling the fastest rate of income growth since the survey began in 2009.
Mirroring the trend for current finances, latest data revealed a moderation in households’ expectations for their financial wellbeing in the next 12 months.
Entrenched pessimism regarding the financial outlook contrasted with a solid rise in income from employment.
Moreover, households reported the lowest degree of job insecurity since the survey began more than nine years ago. Concerns about household budgets in the year ahead appeared to reflect stronger inflation expectations in June.
The balance of survey respondents anticipating a rise in living costs during the next 12 months picked up to the highest since February. Labour market conditions remained the main bright spot for household finances in June.
The index measuring workplace activity pointed to the strongest rate of expansion for over three-and-ahalf years, thereby suggesting an improved rate of underlying economic growth in June.
At the same time, survey respondents indicated a survey-record rise in income from employment and the lowest degree of job insecurity for over nine years. June data indicated that UK households’ interest rate expectations moderated over the month.
Around 45% of survey respondents anticipate a Bank of England rate hike by the end of 2018, down from 54.6% in May.
On a longer-term horizon, the vast majority of UK households forecast a rise in the Bank of England base rate.
Around three-quarters expect a rise in the next 12 months, while 86% anticipate increased interest rates at some point over the next two years. ■