UK Households More Optimistic on Finances in January
By Jerin Mathew | January 21, 2013 7:43 PM EST
The UK households were more confident on their financial prospects in January with an index of personal finances declining at a slower pace in the month due to better consumer perceptions about inflation, job security and credit availability.
The Markit Household Finance Index (HFI) rose to 37.7 in January from a seven-month low of 36.8 in December, indicating an improvement in overall situation. However, the reading remained below the 50 threshold which showed deterioration in household finances in general.
The HFI, compiled each month by Markit tries to capture the consumer behaviour which is also assessed by the Bank of England for its policy deliberations.
About 31 percent of respondents noted deterioration in their financial situation, while 6 percent of respondents saw an improvement.
Inflation perceptions hit a five-month low and households reported the least downbeat sentiment about access to unsecured credit since the survey began four years ago, Markit said.
"January's survey provides a rare spot of good news on the consumer front, with households' financial sentiment rebounding appreciably after a dismal end to 2012," said Tim Moore, Senior Economist at Markit.
"Inflation perceptions are the lowest since last summer, while the index measuring households' appetite for major purchases picked up sharply from the near-record drop seen in December."
The measure of households' intention to make major purchases fell at the slowest pace since October 2010, primarily due to improved sentiments regarding access to unsecured credit. The central bank's Funding for Lending Scheme is channelling more credit into the broader economy.
The index measuring overall job security dropped the least since the survey began in early 2009. The index component showing outlook for the next 12 months showed that British households are more pessimistic about prospects for their personal finances.
"The unfavourable economic backdrop and squeezed incomes are clearly making it difficult to keep household finances on an even keel. Overall, however, households are having to making hay while the sun isn't shining, and January's upturn from the lows of 2012 suggests that some gradual financial improvements are being made in spite of fragile conditions across the UK economy," Moore added.
To contact the editor, e-mail:
Most Popular Slideshows
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- Prince Harry & Camilla Thurlow Getting Serious, St. Tropez Holiday Before The Prince’s 30th Birthday [PHOTOS]
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Top 5 Richest Tennis Athletes
Join the Conversation
- Russia Invades Ukraine, Pro-Russian Rebels Create 'Second Front,' Obama Maintains No Military Action from US
- TEPCO Loses in Fukushima Suicide Case, Ordered to Pay $472,000 to Family
- Better Market Your Uranium Someplace Else, Japan Appetite No Longer Huge as Before – Former PM Tells Australia Queensland Premier Campbell Newman
- ISIS Wants $6.6M and Release of Aafia Siddiqui in Exchange of Head of Female US Humanitarian Aid Worker, 1st American Fighting for Jihadis Dead
- Product Recall Alert: Hewlett-Packard Pulls Out 6M Power Cords from US, Canada Over Fire Hazard Concerns, Australia Also Affected
- Sept 19 iPhone 6 Release Date Firms Up as iWatch Rollout Delayed to Jan 2015 – Reports
- Apple iWatch is iPhone 6 Accessory on Sept 19 Release Date: 6 Confirmed Specs & Features
- Canada Vs Russia War Erupts Via Twitter on Russia-Not Russia Maps
- James Foley Torture Involves CIA Waterboarding Technique
- Malaysia Airlines to Axe 4,000 Employees, Including CEO; Suspends Trading of Shares
- North Korea Banker Who Manages Money of Kim Jong-un Defects to Russia With $5 Million
- West Looks Divided in Tackling Russian Invasion In Ukraine