BRITISH households felt their wallets stretched even further in September as a combination of rampant inflation, job market uncertainty and static incomes caused a marked deterioration in households’ finances, the Markit Household Finance Index will show today.
Markit’s survey revealed that 27 per cent of households reported a deterioration in September compared to just 7 per cent recording an improvement. The index rose to 40.2 from 37.9 in August but remained well below the 50 no-change level.
Households’ gloom is not expected to shift soon – 41 per cent of households anticipate a worsening in their financial situation over the next 12 months compared to 23 per cent that forecast an improvement.
Tim Moore, economist at Markit, said: “September’s survey adds to a growing weight of evidence that UK households are braced for a renewed squeeze on their finances in the months ahead. Concerns over pay and job security remain at the forefront of people’s minds, while stubbornly high inflation and an impending VAT rise are becoming increasingly difficult to ignore.”
Consumers’ confidence is not being helped by the gloomier outlook for the UK housing market. Hometrack’s monthly housing survey, published today, showed prices falling across all regions for the first time since April 2009.
Nationally, house prices fell by 0.4 per cent and for the third consecutive month. Hometrack expects this period of falls to continue well into 2011.
“Agents report that there are fewer purchasers and that those purchasers looking to buy are both cautious and choosy – the return to a buyers’ market seems inevitable in the coming months,” said Richard Donnell, director of research at Hometrack.