Households’ finances in better shape

Tim Wallace
Follow Tim
RISING incomes and flatlining prices are easing the squeeze on British households in the run up to the General Election, figures from Markit showed yesterday.

Improved pay from growing employment helped drive its household finance index climbed to 45.8 in April from 45.5 in March, hitting the highest level since the survey started in 2009.

As the score approaches 50, it indicates a smaller net balance of households reporting a financial squeeze.

The index for expectations in 12 months’ time came in at 50.7, down a touch on the month but still above 50, indicating optimism.

Workplace activity improved for the 35th consecutive month, although households are slightly more worried about their job security.

Households also expect to wait longer for interest rates to rise, giving them more time to borrow at cheap rates – just 26 per cent now expect a hike from the Bank of England in the next six months.

Thirteen per cent believe a rate hike is more than two years away, while another seven per cent expect rates to be cut rather than increased.

Related articles