UK household finance pressures ease in November - Markit

Nov 19 2012, 12:47 IST
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SummaryHeadline Household Finance Index rose to 39.3 in November from 39.0 in October

The deterioration of Britons' personal finances slowed for the second consecutive month as fears over inflation eased in November, a survey showed on Monday.

Survey compiler Markit said that its headline Household Finance Index rose to 39.3 in November from 39.0 in October, reaching its highest level since December 2010.

However, the index remained below the 50 level that would mark no change. Around 28 per cent of respondents said their financial situation has worsened this month, while less than 7 per cent reported an improvement.

November's survey highlights that the alleviation of strains on household finances has continued as winter approaches, said Markit economist Tim Moore.

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.

Current inflation perceptions by respondents dropped in November for the first time in four months, and inflation expectations also improved slightly.

However, almost three quarters of respondents reported that their cost of living had increased compared to the previous month.

The surprise uptick in consumer price inflation during October, alongside muted trends in employee earnings, suggests that the recent moderation in financial strains may prove somewhat transitory, Moore warned.

Britons' view of their financial outlook remained bleak with around 40 per cent of households expecting their finances to worsen, with only 23 per cent anticipating an improvement.

The survey also showed that people renting from private landlords saw a particularly large drop in their finances in November, pressured by rising property rental costs.

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