According to a survey of 1,500 people conducted in October 2018, the confidence of British households in their finances has worsened. This is due to the lowest rise in employment earnings since February.
This is already leading to growing caution in consumer spending according to the survey by the HIS Markit Household Finance Index. The Bank of England uses the IHS Markit index to gauge the financial health of consumers.
“UK households cast their most downbeat assessment of current finances in three months in October as weaker earnings growth from employment limited cash availability,” IHS Markit economist Joe Hayes said.
The optimism about house prices as well as the public’s inflation expectations is the lowest since just after the Brexit vote in 2016 according to the data firm, HIS Markit.
Another source of financial health gauge, Pollsters GfK also reported that the expectations of the British public for their personal finances for the next 12 months was at a five-month low in September.
23 percent of households expect a weakening in the personal finances in the next 12 months, the highest proportion of households since 2013 according to the latest Thomson Reuters/Ipsos Primary consumer sentiment index.
Half of the households surveyed are expecting an interest rate increase within the next few months and are increasingly concerned about future budgets.
What does this news mean for businesses? An awareness of the concerns of the British public as well as the spending power must be factored into the business planning, budgets and pricing to prevent a decline in market share.