30% of households report drop in finances

Three in 10 UK households reported a drop in their household finances in August, says the Markit/YouGov Household Finance Index.

The drop reflects a decline  in income from employment and a rise in price of goods and services plus a falling rate of job security.

There was also a perception of falling house prices but 29% expect a rise in prices with 26% anticipating a decline.

A total of 47% of households expect their finances to worsen in the next year while 25% anticipate and improvement.

Tim Moore, economist at Markit, says: “Stronger growth in the UK economy has done little to put a floor under the downturn in household finances. A downbeat mood spans the household income spectrum, but remains most acute amongst the lowest earners.

“Household finances continue to suffer from a backdrop of squeezed disposable income, stubbornly high inflation and ongoing public sector spending cuts. Meanwhile, job security in the private sector fell at the fastest rate for thirteen months, suggesting that the renewed bout of employment concerns has reverberated beyond the public sector.”