UK Household Finances Continue To Deteriorate In September

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UK households’ perception about the financial well-being showed another sharp fall in September but this was less severe than the fall logged at the height of the covid-19 pandemic, survey data published by IHS Markit showed Monday.

The household finance index remained unchanged at 40.8 in September.

Households’ perceptions of their finances in 12 months’ time weakened in September, with the respective index reaching the lowest since May.

Spending decreased moderately though the reduction was the weakest in the current six-month sequence of falls. Amid lower disposable incomes, household savings were again depleted in September. Moreover, the latest fall was the sharpest since December 2013.

Further, the measure of demand for unsecured credit, such as overdrafts and credit cards, moved above the 50.0 threshold and hit its highest level since April.

However, perceptions of job security remained extremely weak with the index falling further into negative territory, registering at 39.9. Due to squeezed wages and high uncertainty, households’ appetite for major purchases fell in September.

Given the latest figures and the recession the UK is facing during the pandemic, there is undoubtedly a long and uncertain road ahead for UK households to recover financially, Lewis Cooper, an economist at IHS Markit, said.

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