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U.K. Household Finance Index slips to 42.5 in April, rising inflation and subdued pay growth create renewed squeeze

Markit Household Finance Index (HFI) for April showed that squeeze on UK household finances worsened during April. April seasonally adjusted Household Finance Index fell to 42.5, from 43.1 in the previous month. It was one of the lowest readings seen since the summer of 2014.

The HFI is compiled each month by Markit, and is intended to anticipate changing consumer behaviour accurately. Data showed that weak pay growth and rising living costs exert greater pressure on UK household finances. Survey data showed sharpest fall in cash available to spend since August 2014.

That said, despite a greater squeeze on financial wellbeing, the latest survey suggested that consumer spending remained resilient. Households reported the fastest rise in spending since last June. There was an erosion of savings and greater demand for unsecured credit.

“Evidence that consumers are opting to maintain spending rather than belt-tighten provides a positive signal for UK economic growth in the short-term," said Tim Moore, senior economist at IHS Markit.

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4.25 %

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3.50 %

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5.00 %

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5 %

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54.2 k

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40.1 k

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