Consumer morale has hit a bit of a low of late. This isn’t that surprising when you consider that tax hikes, stagnating wages and high inflation have contributed to Briton’s facing the toughest financial conditions for 30 years. Although inflation has fallen considerably from its high of 5.2 per cent in 2011 to Augusts’ figure of 2.5, inflation fears still persist in the wake of higher commodity and oil prices.
It may seem a bit strange then that figures released today indicated that in September even though inflation woes rose, Britons’ perceptions of their future finances were less pessimistic then they have been for two and a half years.
Today survey compiler Markit released their Household Finance Index for September and it stood at 38.4. After Augusts 20 month high of 38.9 this figure (despite still being one of the largest recorded over the past two years) indicates that over the course of the month consumers’ finances worsened. Both Augusts’ and September’s readings were well below the 50 level which registers no change.
Roughly 75 per cent of respondents asserted that their costs of living had increased in recent weeks whilst the month-on-month index rise which assesses inflation perceptions was the greatest for 18 months.
Markit economist Tim Moore commented that the results revealed that ‘households appear to have become more concerned about the inflation outlook, with cost of living expectations rising sharply since August.’
However, Markit also reported that some households asserted that they were feeling the pinch less and that the spending restraints on their savings and incomes felt looser.
29 per cent of the survey’s participants expected to see an improvement in their finances in the next 12 months. Although 40 per cent forecast worsening finances this was still the most upbeat financial outlook recorded since spring 2010.
Moore stated that this most recent survey ‘suggests that the gradual easing of pressure on real incomes so far in 2012 continues to support household finances.’
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