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Finances worsen for 40% of UK households

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by Gill Montia
Finances worsen for 40% of UK households

Almost 40% of UK households saw their finances deteriorate in August, according to the latest Markit Household Finance Index, with the rate of deterioration faster than at the height of the recession.

Worsening finances were evident across all income groups, age ranges and regions, as the survey registered the fastest fall in cash available to spend on record, and the sharpest reduction in savings since March 2009.

Almost 34% of households reported a drop in their savings in August, compared to just 9% reporting an increase, signalling the steepest reduction in savings for almost two-and-a-half years.

Meanwhile, around 22% of households saw a rise in debt, compared to 17% noting a fall, and strains on household finances contributed to a deterioration in respondents’ willingness to make major purchases.

Commenting on the findings, Markit’s senior economist, Tim Moore, says: “August’s survey is the first sign that the slew of downbeat headlines has knocked consumer sentiment.”

He adds: “With a global economic slowdown and an escalating eurozone debt crisis lapping on the shores, it was unsurprising to see households’ appetite for major purchases reverting back to its lowest since the start of the year.”

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News posted: August 22, 2011

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