UK wages fall steeply in August as job fears grow
UK households suffered a fall in wages in August and reported increased fears about job security, a survey published today said.
The IHS Markit UK Household Finance Index (HFI) – which measures households’ overall perceptions of financial wellbeing – fell from 41.5 in July to 40.8 in August, “signalling a further, slightly sharper, deterioration in the financial situation of UK households,” the report said.
UK households remain “highly pessimistic of their financial wellbeing over the coming 12 months,” the survey found.
Incomes from employment dropped sharply last month and job security perceptions remained pessimistic.
Households continued to cut back on spending and there was an increased demand for unsecured credit.
The demand for credit was driven by a reduction in cash availability, with the latest survey data showing a “marked reduction” in the amount of cash available to UK households.
Lewis Cooper, economist at IHS Markit, said: “The latest survey data highlight a continued strain on the finances of UK households, with the headline figure dipping in August as pressure intensified slightly.
“The 12-month outlook for finances remained highly negative amid substantial uncertainty surrounding the economic impact of the COVID-19 pandemic.
“Incomes from employment fell sharply again, while the survey measure of job security perceptions remained firmly in negative territory as the winding down of the government’s furlough scheme looms.
“Overall, the data hint at some worrying trends when put in the context of the significant recession facing the UK.
“Although lockdown measures are looser; households are spending less, earning less and unsure about their jobs, all of which has the ability to add severe friction to the pace of the economic recovery.”