UK households grow less confident about their finances in October - IHS Markit
LONDON (Reuters) - British households’ confidence in their finances worsened this month as their earnings from employment rose at the weakest rate since February, adding to growing signs of caution among consumers, a survey showed on Monday.
FILE PHOTO - A couple looks at what is on offer at Sandgate Seafoods, a local fish shop in Whitby, northern England February 26, 2013. REUTERS/Dylan Martinez
The IHS Markit Household Finance Index, watched by the Bank of England as a gauge of consumers’ financial health, cooled to a three-month low of 45.1 from 45.7 in September, though the reading is still one of the highest since the survey’s 2009 launch.
The survey’s findings may raise eyebrows among BoE officials who expect inflation pressure to pick up over the next couple of years, driven by a gradual pick-up in wage growth.
Data firm IHS Markit said the British public’s inflation expectations for the next 12 month fell this month to the lowest in two years, while optimism about house prices was the lowest since July 2016 — just after the Brexit vote.
“UK households cast their most downbeat assessment of current finances in three months in October as weaker earnings growth from employment limited cash availability,” IHS Markit economist Joe Hayes said.
“Looking ahead, households were more concerned about their future budgets.”
Other gauges of financial sentiment among households have also soured recently.
Expectations for personal finances over the next 12 months struck a five-month low in September, according to a closely-watched report from pollsters GfK.
And the latest Thomson Reuters/Ipsos Primary Consumer Sentiment Index showed 23 percent of households expect their finances to weaken over the next year — the biggest proportion since March 2013.
IHS Markit said households’ expectations for Bank of England interest rates were barely changed compared from a month ago, with half of households expecting another interest rate hike within the next six months.
The survey of 1,500 people was conducted between Oct. 11 and Oct. 16.
Editing by David Milliken
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