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40% of households have seen their finances take a dip in the last month, according to financial information company Markit.
In a study of 1500 adults, Markit used the Household Finances Index (HFI) to determine the state of the country’s personal finances. They have found that debt levels have gone up in a large proportion of households, while savings and take-home income has taken a drastic fall. As a result, the HFI has fallen for three consecutive months.
Savings have fallen by the largest amount in two and a half years, while disposable income has taken the biggest fall since the survey began. In fact, general household finances haven’t seen this steep tumble since February 2012, when we were right in the middle of the recession.
The bleak findings seem to cover all age ranges, income levels and regions. However, some areas were harder hit than others. South east England saw the gentlest decline in situation, while more northern regions saw a steeper drop.
Good news was very thin on the ground, as only 6% of households reported an improvement in their financial situation
Tim Moore, senior economist at Markit, told the BBC that the bleak findings reflect the gloomy attitude in the global economy as a whole: “Recent events have made a week seem a long time in economics and August’s survey is the first sign that the slew of downbeat headlines has knocked consumer sentiment.”
Things are unlikely to get better any time soon, as the Bank of England are predicting inflation to rise up to 5% due to the high price of oil and other utilities.
Batten down the hatches, folks. It looks like we still have a fair bit of this storm to weather yet.
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August 22, 2023
banking