UK households' money worries greatest in nearly six years - IHS Markit
Reuters
Published Sep 23, 2019 12:06
By David Milliken
LONDON (Reuters) - British households are more worried about their financial prospects now than at any time since 2013, partly because of concerns about the economic and political outlook as the country prepares to leave the European Union, a monthly survey showed on Monday.
The IHS Markit Household Finance Index sank to a four-month low of 43.1 in September from August's 43.6, as households' relatively upbeat assessments of their current situation was undermined by darker future prospects.
Willingness to make major purchases such as cars or holiday bookings was the lowest since December 2013, and the assessment of their financial situation in 12 months was the most negative since November 2013.
"Political and economic uncertainty had caused nervousness surrounding job security," IHS Markit economist Joe Hayes said.
Prime Minister Boris Johnson is determined to take Britain out of the European Union by Oct. 31, without a transition agreement if necessary, despite opposition from parliament.
Although unemployment is low and wage growth is at an 11-year high, Britain's economy shrank in the last quarter and subsequent business surveys have been weak, as companies blame the United States-China trade conflict and no-deal Brexit risks.
"(The) latest data suggest that the robust performance of the UK labour market may not be sufficient to dispel the pessimistic financial outlook, which could ultimately see weaker consumption trends at a time where the economy hinges on domestic resilience," Hayes said.
Britain's Thomas Cook (L:TCG), the world's oldest travel company, collapsed on Monday after struggling to pitch itself to a new generation of tourists.
Despite their gloomier mood, households' expectations of Bank of England policy were little changed. Some 23% think the BoE will cut interest rates from the current 0.75% during the next 12 months, unchanged from August. Almost 60% think it will increase rates, up from 58%.
Unlike their counterparts in the United States and euro zone, Britain's central bankers say they still intend to gradually raise rates if the government concludes a Brexit deal and the economy picks up.
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Written By: Reuters
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