Squeeze on household finances eases slightly as Christmas looms

 
Ben Southwood
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HOUSEHOLD finances are still tightly under the squeeze in November, according to data out today, but deteriorated at the slowest rate for nearly two years.

Markit’s household finance index hit 39.3 in November, it said, up from 39 in October – but still that would indicate no change – suggesting UK residents are under pressure in the tough economic climate.

But despite the gloomy headline figure it was the highest index value since December 2010. “November’s survey highlights the fact that the alleviation of strains on household finances has continued as winter approaches,” said Markit economist Tim Moore. “A reduced squeeze on cash availability helped to stabilise debt levels, while pressures on savings were the lowest in two-and-a-half years. However, expectations for the year ahead remain subdued, as the dismal global economic backdrop means the recent easing in financial pressures is more a cause for relief than celebration.”

This outlook index climbed from 37.4 in October to 41.8 in November – remaining below September’s 44.3, with only 23 per cent of households expecting their finances to improve over the coming 12 months.