UK households positive about future finances for first time in eight months
UK households have turned positive about their future finances for the first time since November last year as wages continue to grow.
Financial health expectations for the next twelve months moved into the positive in June, according to the latest IHS Markit household finance index.
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But current financial health perceptions remained negative as Brexit uncertainty lingered in the forefront of people’s minds.
Over the longer term households were more buoyant as workplace activity and incomes from employment continue to rise.
The future household finance index rose to 51.5 in June from 49.2 the previous month and above the neutral score of 50 for the first time since last November.
“If meaningful wage growth and a low and stable inflation environment can be sustained, this should support purchasing power gains for UK households,” IHS Markit economist Joe Hayes said.
“Indeed for the first time since November 2018, financial wellbeing expectations for the coming twelve months turned positive,” he added.
Despite rising expectations, job security remained negative for an eleventh consecutive month and employment income growth eased for a second month in a row.
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Households maintained the view that the Bank of England’s next move would see a rate increase, with 69 per cent expecting the hike to come in the next twelve months and 43 per cent anticipating a rise by the end of 2019.
But those predicting a cut on the horizon rose to nine per cent from 8.3 in May.