THE LONG squeeze on UK households is ending, job prospects are looking up and the economy is heading back towards sustained growth, a raft of upbeat figures showed yesterday.
Recent improvements in economic data seem at last to be feeding through to families’ finances, suggesting a recovery is taking hold more than five years after the financial crisis began.
Fewer British households are in financial trouble now than a year ago, according to a Legal and General study published yesterday.
The proportion of households with money left over each month has risen from 43 per cent to 45 per cent in the past year, while the amount they managed to save each month has risen from £71 in April 2012 to £88 in April 2013.
Meanwhile the proportion of those struggling to cover their bills has fallen from 16 per cent to 15 per cent, with stretched households short of an average of £72 per month, edging down three per cent on the £74 shortfall last year.
“We hope this is perhaps an early indication we have weathered the current economic storms and we will see people saving in even bigger numbers,” said Legal and General’s head of savings Mark Gregory. “There are positive early signs of a move back to long term saving, such as saving for a pension, up 25 per cent on the year.”
The Organisation for Economic Co-operation and Development’s (OECD) leading index, also out yesterday, suggests the UK will be back towards its trend rate of economic growth in six months’ time. The think tank’s indicator rose to 100.8 in April from 100.7 in February and March – above the 100 level that indicates the long-term trend.
London is leading the charge towards a more optimistic outlook. A study from recruiter Manpower Group shows a five per cent rise in the number of firms in the capital that are planning to take on more staff this quarter.
There are 13 per cent more businesses in the city on a hiring spree than those shedding staff. Even under-pressure retailers are starting to increase hiring, the study found, while construction has also improved strongly, pointing to an end of five years of gloom.
Tim Wallace, Michael Bird