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UK households positive towards future finances for first time since 2016

Staff Writer |
The headline seasonally adjusted IHS Markit Household Finance Index (HFI) rose to 44.6 in July, up from 43.6 in June and thereby indicating a softer squeeze on household budgets since the preceding survey.

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Furthermore, the index registered above the long-run average, with the latest reading being the second-highest since December 2016.

A continued solid increase in income from employment and softer inflationary pressures combined to help ease the perceieved strain on current finances.

Reduced pressure on finances led to one of the fastest rises in spending since early2015.

In terms of inflation, perceptions towards current inflation eased to the lowest in over a year.

In addition, future price expectations fell to a 19-month low during the latest survey period, indicating that UK households forsee a softer squeeze from inflationary pressures over the next year.

Reflecting easing consumer price inflation and improving labour market conditions, UK households reported the most positive outlook towards finances over the next 12 months since March 2016.

At 51.3, up from 48.2 in June, the seasonally adjusted Financial Expectations Index registered above the 50.0 no-change mark, signalling that households are generally optimistic about the year ahead outlook.

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