UK Households’ Financial Situation Improves In June
Strain on British household finances eased in June but it remained strong as lockdown measures persisted, survey data from IHS Markit showed on Monday.
The Household Finance Index, which measures households’ overall perceptions of financial well-being, rose to 40.7 in June from 37.8 in May and further above April’s near eight-and-a-half-year low.
UK households were the least negative towards the prospects for their financial health in the coming year since March.
The survey showed that there was a tentative signs of an improving trend in financial conditions for households in June.
Nonetheless, workplace activity continued to fall sharply in June, although the rate of contraction slowed since May. Moreover, households maintained a strongly pessimistic view towards job security in June.
Around 50 percent of surveyed households expect the Bank of England to increase interest rates within the next year. This was up from 44 percent in May.
“It appears that households are still faced with a number of difficulties which will hold back a broad-based economic recovery,” Joe Hayes, an economist at IHS Markit, said.
If households are fearful for their job security and their incomes are falling, the UK’s path of recovery could be a slow one, Hayes added.