Belfast Telegraph

Household finance conditions mixed

Concerns about job security have fallen sharply but household finances remain under intense pressure, according to new figures which paint a mixed picture for the economy.

The Markit household finance index of overall financial wellbeing recorded a level of 40.8 this month - well below the neutral 50 threshold. While unchanged on August, it was one of the highest readings since the survey started in 2009, the consultancy said.

Job security perceptions also hit a four-and-a-half year high of 46.8, from 44.8 in August, suggesting workers are less concerned about losing their jobs.

However, the figures also showed the gulf between homeowners and renters is widening, with financial perceptions among outright homeowners hitting a 14-month high of 44.1 in September, compared with a five-month low of 38.8 for private renters.

Households also remain pessimistic about the outlook for the next year, despite the gathering pace of Britain's recovery.

Some 38% predict their finances will deteriorate over the next year, and only 26% forecast an improvement - giving an index of 44.1, slightly higher than August's three-month low.

While financial expectations among households in the top 20% on income hit a three-and-a-half year high of 55.5, those in the lowest fifth posted one of the weakest readings this year at 32.7.

People working in finance and business services were the most optimistic about their finances, but those in manufacturing the most downbeat.

Tim Moore, senior economist at Markit, said: "Strains on household budgets have receded since the beginning of 2013, and September's survey suggests that better job security is also helping to bolster consumer confidence.

"This summer's positive change of direction for the UK economy has resulted in the lowest degree of job security concerns for over four-and-a-half years.

"While the headline figures make for encouraging reading, there are signs that subdued pay trends have widened existing gaps in financial wellbeing."

In good news for the Bank of England, inflation perceptions eased to 81.3 from 81.7 - below the average of 82.7 seen since the survey started in 2009.