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UK households' view on finances unchanged after Brexit shock

Published 21/09/2016, 09:54
© Reuters. File photograph of a customer carrying a shopping basket at an Asda store in northwest London

LONDON (Reuters) - British households' expectations about their personal finances held steady in September, a survey showed on Wednesday, another sign that consumers so far have been largely unperturbed by the country's vote to leave the European Union.

Financial data firm Markit said its Household Finance Index stayed broadly flat at 44.8 in September from its August level of 44.9, maintaining the rebound from a plunge in July shortly after the referendum on EU membership.

Expectations for living costs in 12 months' time dropped to their lowest since January.

The Bank of England has predicted that households will gradually feel the pinch of weaker spending power following the referendum as the sharp fall in the value of sterling trickles down to consumer prices.

The BoE last month cut interest rates to a record low and took other measures to help the economy cope with the effects of the Brexit vote.

"A swift monetary policy response and a more settled political picture have likely helped to allay fears of a severe downturn", Markit economist Philip Leake said in a statement.

The survey showed 25 percent of households expected another BoE rate cut "at some time," down from 39 percent in August.

The BoE said on Sept. 15 that it was likely to cut rates again before the end of the year, pending its November assessment of the economic outlook.

© Reuters. File photograph of a customer carrying a shopping basket at an Asda store in northwest London

The online survey of about 1,500 people was conducted by polling firm Ipsos MORI between Sept. 14-18.

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