Published on February 19th, 2019 | by The GC Team0
Household finances deteriorate at sharpest rate since March 2018
The IHS Markit Household Finance Index, which is “intended to anticipate changing consumer behaviour accurately,” has fallen to its lowest point for nearly a year. The latest data, collected by Ipsos MORI during February 7th – 12th 2019, has strong relevance to retailers since it is an indicator of how current financial wellbeing among UK households will affect consumers’ appetite for retail spending.
At 43.4 in February, compared to 44.7 in January, the index shows a stronger deterioration in financial wellbeing. And future expectations were also downbeat than in January, while job security perceptions were at their weakest for more than a year. Perhaps unsurprisingly, the manufacturing and retail sectors were the most negative about future job security.
Joe Hayes, Economist at IHS Markit, said: “With the latest official GDP figures revealing slowing growth momentum in the UK, latest survey data from UK households revealed the sharpest deterioration in current financial wellbeing in almost one year, highlighting the headwinds that fragile consumer finances present to the wider economy. The HFI survey also pointed to greater pessimism towards financial conditions over the coming 12 months.
“The latest HFI survey also signals that the improvement in real earnings growth, which has been driven by higher nominal pay and softer inflation, may not necessarily translate into boosted spending by UK consumers. The impact on confidence caused by Brexit uncertainty continues to pose a notable risk to the domestic economy, also highlighted by job security perceptions becoming increasingly negative in February.”