Member Article

Householders are becoming more optimistic

Householders across the UK are feeling more optimistic about their financial situation than at any other point during the past two years - despite witnessing the sharpest fall in wages for five months.

According to the Markit household finance index, the prospect of lower inflation has made most householders optimistic, with many looking forward to closing the gap between wages and rising prices over the next 12 months.

In June household spending fell, after 33%of householders witnessed worsening finances, and only 7% said it had improved.

Current finances registered a balance of 37, below the 50-plus level which indicates improvement.

Many households were also concerned by the prospect of a deterioration of job security than an improvement, although the gap has closed slightly to produce an index of 44.5, the second highest reading since April 2010.

Despite this however, a fall in inflation is said to indicate the fragility of the economy, and official figures highlight that poor performances in manufacturing, services and construction sectors.

Commenting on the figures, Tim Moore, an economist at Markit, said: “Lower inflation provided some relief to UK household finances in June, ushering in a slower drop in cash availability and the least downbeat assessment of future finances for over two years.

“A worsening global economic backdrop in June, alongside reports of a greater drop in income from employment, continued to keep the pressure on household finances.

“This in turn resulted in an aversion to major purchases, as well as a further erosion of savings and subdued spending patterns, especially among the lowest income groups.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .