Higher inflation still eating into family budgets

DESPITE rising pay from employment, most households still say their finances are being squeezed by soaring prices, according to data out today from Markit.

Twenty-eight per cent of households reported worsening finances, far outweighing the nine per cent who noted an improvement through this month.

The squeeze has eased to its weakest in three years, as a slim majority of respondents reported lower perceptions of inflation. But overall declining standards of living are still being felt.

London and Yorkshire had the least squeezed incomes in the country, while a large majority of residents in the north east and north west remained gloomy about their future economic prospects.

Markit’s senior economist Tim Moore described a growing divide between workers in different types of employment. “The latest survey indicates a wide gap between the relatively strong confidence of those with private sector services jobs and, on the other side, the downbeat expectations of construction, retail and public sector employees,” he said.

Construction workers revealed the largest decreases in pay. Earlier this month it was reported that there are more cranes in London than the rest of the UK combined, with building work remaining anaemic outside of the nation’s capital.

The data also suggested a preference for saving over spending: major purchases remained flat and the index for savings reached the highest in the survey’s history.