New research published today suggests that the finances of the average UK household declined this month at the sharpest rate since March 2009.
For this month’s Household Finance Index (HFI), compiled by independent analysts Markit, almost 35 per cent of households reported that their financial situation had worsened since February and only five per cent said they improved.
Around 82 per cent of respondents said that the cost of living had increased in March, available cash fell for 39 per cent of people and 25 per cent of those questioned said worries about job security increased in the month.
Tim Moore, Senior Economist at Markit, said: “The March HFI survey presents a bleak assessment of household finances ahead of the UK Budget.
“Job insecurity and worries about higher everyday living costs once again dominate the outlook for household finances, which fell to its lowest since the survey began in February 2009.”
A monthly consumer confidence report produced by UK building society Nationwide last week, showed customer sentiment at its lowest since May 2004.
The retail industry will be hoping to hear good news in his week’s Budget statement to help boost business but equally important will be measures to ease customer concerns and boost flagging consumer spending.
Moore continued: “The growing headwinds facing UK households are likely to continue to hold back consumer spending in the months ahead.
“Higher living costs have resulted in a survey-record drop in cash available to spend, and despite pockets of growth in manufacturing and business services, weak economic conditions mean that incomes continue to fall behind inflation.”