November 19, 2012 / 7:11 AM / 5 years ago

Household finance pressures ease

LONDON (Reuters) - The deterioration of Britons’ personal finances slowed for the second consecutive month as fears over inflation eased in November, a survey showed on Monday.

A shopping bag hangs from a pram outside a shop on Oxford Street in central London November 5, 2012. REUTERS/Olivia Harris

Survey compiler Markit said that its headline Household Finance Index rose to 39.3 in November from 39.0 in October, reaching its highest level since December 2010.

However, the index remained below the 50 level that would mark no change. Around 28 percent of respondents said their financial situation has worsened this month, while less than 7 percent reported an improvement.

“November’s survey highlights that the alleviation of strains on household finances has continued as winter approaches,” said Markit economist Tim Moore.

“However, expectations for the year ahead remain subdued, as the dismal global economic backdrop means the recent easing in financial pressures is more a cause for relief than celebration.”

Current inflation perceptions by respondents dropped in November for the first time in four months, and inflation expectations also improved slightly.

However, almost three quarters of respondents reported that their cost of living had increased compared to the previous month.

“The surprise uptick in consumer price inflation during October, alongside muted trends in employee earnings, suggests that the recent moderation in financial strains may prove somewhat transitory,” Moore warned.

Britons’ view of their financial outlook remained bleak with around 40 percent of households expecting their finances to worsen, with only 23 percent anticipating an improvement.

The survey also showed that people renting from private landlords saw a particularly large drop in their finances in November, pressured by rising property rental costs.

Reporting by Li-mei Hoang; Editing by Toby Chopra

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