Household spending rises
Household spending has risen amid generally improving trends for consumers, especially in the south of England.
According to the Markit Household Finance Index, households reported an increase in spending during August, with almost one-in-four respondents noting a rise (24%) and only 16% a reduction.
Living costs were perceived to have increased at a weaker rate than in July, and the year-ahead inflation outlook moderated to its lowest since May.
The survey found a lessening squeeze on cash availability and a more positive view of unsecured credit availability. People that own their home outright were the most positive about access to unsecured credit, followed by mortgage holders.
The survey found that people in Scotland and the south of England were the least downbeat about their finances, while those in Wales and the north of England were among the most pessimistic.
Meanwhile, although consumers were averse overall to purchasing big-ticket consumer items, the index measuring appetite for major purchases remained level with July’s three-year high.
Tim Moore, senior economist at Markit and author of the report, said: “A number of factors have combined to support UK household finances this summer, including improving underlying economic conditions, lower consumer price inflation and a general alleviation of strains on cash availability.
“A brightening economic and financial outlook, alongside some signs of improved access to household credit, looks to have spurred consumer spending again in August. Moreover, while survey respondents indicated an overall aversion towards making major purchases, the latest figures showed households remain more inclined to buy big ticket consumer items than at any other time over the past three years.
“August data suggested that the strains on finances are receding fastest among those in private sector service jobs, while those working in construction, retail and the public sector trail behind. On a regional basis, familiar trends continued in August as people in Scotland and the south of England were the least downbeat about their finances, while those in Wales and the north of England were among the most pessimistic.”
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