Downbeat outlook for household finances, survey finds
Households reported the most downbeat financial outlook for two-and-a-half years following the vote to leave the EU, a report has found.
Markit's Household Finance Index (HFI), which aims to anticipate changing consumer behaviour, found the index measuring households' expectations for their finances in 12 months' time pointed to negative sentiment for the fourth month in a row.
The reading for expectations in the coming year worsened to 47, from 49.3 in June. Readings above 50 suggest the situation is improving and those below 50 suggest it is getting worse. Markit said July's reading of 47 was the lowest in two and-a-half years.
Its survey, which took place between July 14 and July 18, asked around 1,500 Britons aged between 18 and 64 years old about their financial situation.
It also found that households' perceptions about their current finances worsened. This reading fell to 44.3, from 44.8 in June.
Among the job sectors monitored, only employees working in the media, culture and entertainment sectors or IT and telecoms saw an outright improvement in their financial wellbeing.
With several recent reports suggesting consumers are set to cut back their spending amid the economic uncertainty following the Brexit vote, retail workers gave a particularly bleak assessment of their finances.
Greater strains on household finances were partly due to households reporting the first fall in workplace activity since May 2012, Markit said.
This contributed to worries about job security, although income from employment increased at a faster pace in July.
The research also found the majority (56%) of households now expect the Bank of England base rate, which currently stands at 0.5%, to be cut - up from just 8% in June.
Philip Leake, an economist at Markit, said: "Markit's latest HFI survey suggests that the Brexit vote has badly affected households' views on their finances.
"With future prospects clouded by uncertainty, July data pointed to the worst financial outlook in two-and-a-half years."