The headline on the press release for yesterday’s Markit/Ipsos MORI Household Finance Index figures says it all:
Widespread gloom among UK households as fiscal cuts take shape
There was a small deterioration in the overall Index, a larger fall in the index of how respondents expected to change over the next 12 months and a particularly large fall in the index of expected movements in house prices. The households in the survey reported an increase in debt and a “moderate decline” in income levels. 27% said that their finances had deteriorated since the previous month, compared with 7% who reported an improvement.
One of the most interesting things about the HFI is that it includes an index for job security. This is a problem with very few data so this alone would make the HFI worth following. Unsurprisingly, public sector workers were the gloomiest about the prospects for the next 12 months, but Markit add that “an air of anxiety continued to seep into the private sector.”
The index runs from 0 to 100 and 50 means no change. The deterioration in public sector workers’ sense of job security after April is particularly noticeable – the election result seems a likely suspect.