UK households have suffered the deepest erosion in their finances in the past seven months to December and the outlook for 2013 looked more bleak, as the Markit Household Finance Index fell to 36.8, which is the lowest since May, from November’s near two-year high of 39.3.
After the disappointing Christmas sales figures of November, the pessimistic outlook of the UK consumer became more evident in the Markit survey which revealed that around 43% of households expect their financial situation will worsen next year, while just 24% think they will see an improvement.
The survey, conducted with around 1,500 people between December 13 and December 17, revealed that three-quarters of all UK households not expecting any improvement in their finances, and predicting that the domestic consumer demand will remain under pressure in the near term, especially since people continue to expect further rise in inflation and job insecurities refuse to die down across the UK. A string of price hikes announced by energy companies, with increased food costs and rents also plaguing the UK household finances.
People in 55-64 age category were by far the most pessimistic about their finances next year, the researchers said. There are four times as many people in this age group who believe their situation will worsen as those who expect to see it get better. This age group was also the most likely to believe their living costs are set to rise steeply.
The survey findings in the job sector revealed that public sector staff turned out to be more pessimistic than those in the private sector. Public sector workers also reported a recent marked drop in their incomes from employment.
Employees of manufacturing sector showed some positivism about their prospects for the upcoming year. Those working in construction were found to be the most pessimistic, the survey said.
Households in Wales were found to be most downbeat while those in south-west England were the least negative, followed by Scottish households.