Britons' finance fears grow on lower pay and higher debt
LONDON (Reuters) - Britons became more worried about their finances in April as they took home less pay, saw their debts mount and expected living costs to rise over the next year but they felt more upbeat about their job security, a survey showed on Monday.
Markit's headline Household Finance Index fell to 37.0 in April, its lowest level in three months, down from 37.8 in March and remaining well below the 50 level which would mark an improvement in Britons' finances.
The decline in the index points to the fragility of consumer morale in Britain less than a week after the Bank of England signalled it would not inject more monetary stimulus into the economy as it fears inflation will now be greater than expected.
"Worsening household finances during April are especially disappointing as it follows some signs that the consumer gloom had started to lift in the first quarter of the year," said Tim Moore, a senior economist at Markit.
But households' anxiety over job security eased to the lowest in just over two years, survey compiler Markit said. Factory workers were optimistic for the first time since the index started in February 2009.
Britain's unemployment rate fell for the first time in 9 months, moving off a 16-year high, in the three months to February, official data showed on Wednesday.
"Job insecurities were the least prevalent for over two years, but this failed to translate into either improved spending patterns or better household confidence," Moore said.
"Instead, households reported falling incomes and sharply increased living costs, which in turn caused a substantial drop in their appetite for major purchases," he added.
GDP figures due out on Wednesday will confirm whether Britain's economy avoided slipping back into recession at the start of this year after contracting by 0.3 percent at the end of 2011.
"If the official data show a continued flatlining or worse then this news will likely be a major drag on household spending into the summer," Moore said.
A separate survey by Lloyds TSB Bank showed British consumers' spending power fell 1.1 percent after inflation in March to its lowest level since February 2011.
(Reporting by Michelle Martin; editing by Ron Askew)
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