Financial mood 'less downbeat'
Some 40% of households predict their finances will deteriorate over the next 12 months, compared with 29% who expect to see an improvement, showing the least pessimistic outlook since March 2010, according to the Markit household finance index (HFI).%VIRTUAL-SkimlinksPromo%
It said improved financial expectations were likely to have been helped by the least marked squeeze on cash availability since December 2010, as savings declined at the slowest rate for two years.
Overall, the index stood at 38.4 in September, only slightly lower than a 20-month high of 38.9 posted in August and one of the highest figures seen in the past two years.
However the figure still falls below the 50.0 mark. Readings above 50.0 signal an improvement and those below it a deterioration. The monthly survey is based on responses from around 1,500 people across Britain.
Tim Moore, senior economist at Markit, said: "September's survey suggests that the gradual easing of pressure on real incomes so far in 2012 continues to support household finances. The headline HFI reading compares favourably with the trend seen over the past two years and, perhaps most encouragingly, the squeeze on savings was the least marked over this period."
The survey found households appear to have become more concerned about inflation, which it suggested was likely to have been sparked by higher fuel costs.
Mr Moore said: "Around three quarters of households noted an increase in their living costs during September, and the monthly jump in inflation perceptions was the largest since the January 2011 VAT rise."
The study said debt levels rose very slightly in September following a brief stagnation in August, which was driven by renters, as home owners saw reductions. Private sector rents have soared over the last year as tenants have become trapped in the rental sector because they have been unable to raise a big enough deposit or meet lenders' toughened criteria.
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