Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

UK households squeezed again, BoE might make it worse - survey

Published 18/09/2017, 08:58
Updated 18/09/2017, 08:58
© Reuters. FILE PHOTO - Rows of houses are seen in High Wycombe

© Reuters. FILE PHOTO - Rows of houses are seen in High Wycombe

LONDON (Reuters) - British households are feeling the tightest squeeze on their finances in three years and the Bank of England's signal that it is getting close to raising interest rates is likely to make things worse, a survey showed on Monday.

IHS Markit said its monthly Household Finance Index fell to 42.8 in September from 43.4 in August though above a three-year low of 41.6 seen in July.

Looking at the third quarter as a whole, the index's average reading is its lowest since 2014.

British households have been pinched by fast-rising inflation since last year's Brexit vote and weak rises in wages.

Monday's survey showed the amount of cash available to spend continued to fall at one of the steepest rates seen over the past three years.

"With the Bank of England sounding increasingly eager to start hiking interest rates, the prospect of higher borrowing costs and increased mortgage payments is likely to hit households further," Tim Moore, a director at IHS Markit, said.

Last week the BoE said it expected to raise interest rates in the coming months if inflation pressure continued to build, surprising many investors.

The IHS Markit survey showed households were also likely to be taken by surprise by the BoE's change of tone. Only 29 percent of respondents expected a rate rise over the next six months, and just 12 percent before the end of the year, IHS Markit said.

© Reuters. FILE PHOTO - Rows of houses are seen in High Wycombe

The survey of 1,500 people was conducted between Sept. 6 and 11, before the Sept. 14 announcement by the BoE.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.