Households least downbeat about money in 30 months

Published on 24/09/2012 02:04

Households are the least downbeat about their finances in two-and-a-half years, the latest survey of consumer confidence has found.

Some 40 per cent of households predict their finances will deteriorate over the next 12 months, according to the Markit household finance index (HFI). That compares with 29 per cent who expect to see an improvement, showing the least pessimistic outlook since March 2011.

Scotland is less pessimistic about household finances than some parts of the UK, such as Wales, which had the most downbeat households surveyed. Londoners took the least negative view, but according to the statistical measure used, they are still not optimistic.

People working in IT and telecoms tended to be the most positive, while those working in health, education and social care tended to be the most downbeat, the study found. Those in the private sector were less downbeat than those in the public sector, continuing a trend seen for almost two-and-a-half years, said the report.

The report concluded that homes had better access to cash, and their savings remained relatively intact, compared to any point in almost two years.

Income from employment declined modestly in September, with 12 per cent of those surveyed seeing a reduction, compared to 8 per cent that noted an increase. Debt levels were up slightly as the number of home renters increased and those with a mortgage declined.

While the research firm’s measure for overall confidence is close to the 20-month high posted in August, Markit still indicates households predict their situation to get worse.

The public’s expectation of inflation is at its highest since May, with around three quarters of those questioned noting that their cost of living had increased since the previous month.

Tim Moore, senior economist at Markit, said a “relatively calm” summer for finances and job 
security has made consumers less downbeat.

He said: “September’s survey suggests that the gradual easing of pressure on real incomes so far in 2012 continues to support household finances.

“The headline HFI reading compares favourably with the trend seen over the past two years and, perhaps most encouragingly, the squeeze on savings was the least marked over this period.”

The survey found households appear to have become more concerned about inflation. Private sector rents have soared over the last year too, as tenants have become trapped in the rental sector, unable to raise a big enough deposit or meet lenders’ toughened criteria.

The monthly survey is based on online responses earlier in September from around 1,500 people across Britain aged 18-64 by polling firm Ipsos MORI.