Squeeze on financial well-being in UK among largest for 2½ years
Any reading below 50.0 signals deteriorating financial well-being.
The February findings from the Markit Household Finance Index (HFI), which is intended to anticipate changing consumer behaviour accurately.
The HFI is compiled each month by Markit, using data collected by Ipsos MORI.
The latest survey indicated that UK household finances worsened at the second-fastest rate since August 2014 (exceeded only by that reported last May).
However, the degree of financial pressure remained softer than at any time between 2009 and the end of 2013.
Worsening financial well-being primarily reflected pressure on household budgets from rising living costs. February data signalled the steepest increase in prices paid for goods and services since April 2013.
With income from employment rising only marginally, households recorded the sharpest drop in their appetite for major purchases for just over three years. This was despite reporting the smallest fall in job security since December 2015.
Expectations for finances in the next 12 months At 48.3 in February, down from 48.5 in January, the seasonally adjusted index measuring expectations for finances in 12 months’ time remained below the 50.0 no-change mark for the eleventh successive month.
However, the headline figure masked a widening divergence between private and public sector workers.
Those employed in the private sector reported the most upbeat expectations for their household finances since March 2016, while public sector employees signalled the greatest degree of pessimism for just over two-and-a-half years.
Workplace activity, job security and incomes There was positive news in terms of workplace activity, which suggested that the UK economic backdrop has remained supportive in February. ■