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UK households' financial strains worsen after referendum

Staff Writer |
UK households's financial perceptions worsened substantially in July following the EU referendum vote, although quickly rising wages and expectations of a cut to Bank Rate were acting as an offset, Markit said.

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The survey compiler's UK Household Finance Index fell from 44.8 in June to 44.3 in July, marking the second-strongest drop since January 2016 and showing that the Brexit vote had "badly affected" families' views of their financial situation.

In parallel, workplace activity decreased for the first time since may 2012, as employers waited for the uncertainty to lift, Markit said.

However, income from employment grew at a survey-record pace and 56.0% of households now expected the Bank of England would lower Bank Rate, versus the just 8.0% who had anticipated such a move in June, while price pressures eased to their weakest in four months.

By sectors, only IT/telecoms and media/culture/entertainment employees noted an improvement in their financial well-being, with the rest reporting a decline. The bleakest assessment came from retail employees.

By income brackets, the downturn was uniform in July, with even the highest earners downbeat about their financial situation, the HFI revealed.

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