Wednesday, August 24, 2011

UK household finances are 'worse than during height of recession'

Household budgets are deteriorating at a faster rate than during the height of the recession in early 2009, according to an analysis of consumers' finances.

Almost 40pc of households saw their finances deteriorate between July and August, compared to just under 6pc that reported an improvement as Britons were hit by rising prices and a squeeze on take-home pay.

The latest Markit household finance index also found consumers suffered the fastest fall in their available cash since the monthly survey began in February 2009.

Income from employment fell for the eleventh month running – August saw the steepest decline in take-home pay for nine months – while spending power continued to be squeezed by rising prices.

Markit said these factors contributed to the sharpest reduction in savings since March 2009. Debt levels increased for the fifth consecutive month, and at the fastest pace since November 2010.

The gloomy outlook applied to all income groups, age ranges and regions monitored by the survey, but consumers in the north of England are suffering more than those in the south, the financial information company found. more