Looming public spending cuts enough to worry households about their finances

Marion Dakers
THE honeymoon period for the new chancellor may be over already as households report a marked loss of confidence in their finances, according to the household finance index (HFI) to be published today.

Uncertainty over job cuts and other austerity measures have led to more than four in ten households surveyed predicting a drop in income in the next 12 months, the most downbeat response since April 2009. While faith in the government’s economic management skills did improve slightly, with 35 per cent of respondents feeling confident, another 34 per cent said they felt less confident when asked by surveyors YouGov and Markit in mid-May. Public sector workers reported a steep slump in job security, and markedly lower expectations of receiving a pay rise than their commercial counterparts.Almost a third in the public sector feel less safe in their jobs, compared to 18 per cent of private sector workers.

Andrew Self at Markit said the survey “showed the reality of impending government spending cuts biting, with job security and the outlook for household finances among public sector workers slumping to the lowest seen since the depth of the recession.”