Markit says decline in family finances is easing

 
Tim Wallace
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HOUSEHOLDS’ finances are still getting worse – but the decline has slowed since August, according to research released today by Markit.

The household finance index (HFI) rose to 35.1 in September, up from 33.2 in August. Any number below 50 shows a decline over that month.

The figures are still grim, however, as 37 per cent of respondents told Markit their finances had deteriorated in the last month, while only seven per cent saw an improvement.

Over the next year, the picture is substantially better, with the future index rising to 42.2 – its highest for 17 months.

That indicates “the worst may be over,” according to Markit’s chief economist Chris Williamson.

Nonetheless, 47 per cent still expect finances to deteriorate over the next 12 months while 31 per cent expect to see an improvement.

Although long-term outlooks have improved over the month, consumers may just be pushing the tough times further into the future. Savings fell and borrowing rose, as households maintained consumption levels despite lower incomes and higher prices, which particularly hit the lowest paid, Williamson said.