The overall squeeze on British household finances eased in July due to the phased reopening of the [economy][1], survey data from IHS Markit showed Monday.
The headline household finance index, which measures households’ overall perceptions of financial well-being, rose to 41.5 in July from 40.7 in June. The reading reached its highest level since March.
The phased reopening across parts of the economy helped to lift income from employment and workplace activity in comparison those logged during the lockdown period.
However, households’ financial outlook for the next 12 months worsened since June, with this index falling to 42.5 in July from 45.9 in June.
Nearly four times as many survey respondents reported a decline in job security during July as those that indicated an improvement.
The indicator for current financial well-being in July rose to 41.6 in July from 37.8 in June.
Households were focused on reining in debt and supporting their savings where possible. As a result, the index measuring demand for unsecured credit fell to 49.3 in July from 50.1 in June.
About 49 percent of respondents expect the Bank of England to increase interest rates within the next year.
Tim Moore, Director at IHS Markit, said “July data illustrates that UK households continue to tighten the purse strings despite a phased reopening of the economy and return to work after the lockdown period.”
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