Shanghai, China (PRWEB) January 25, 2018
A report by Shanghai, China-based Ashton Whiteley has highlighted the strain on many UK consumers as it reveals that British households showed less optimism about their finances last month as expectations about future inflation reached an almost four-year high and they turned more to borrowing.
Data company, IHS Markit reported that its Household Finance Index dropped to 43.0 from 43.7 in the last month of 2017.
The UK’s economy slowed last year as increased inflation, largely due to the post-EU referendum devaluation of the pound which damaged the spending power of British households.
Ashton Whiteley economists say that official data revealed 2017 to be the worst year for UK retail sales in 4 years.
According to the Bank of England, the pressure on households is expected to ease somewhat this year as inflation cools and salary growth improves but Ashton Whiteley economists say that consumers lack optimism.
Although inflation dropped from its nearly six-year high to 3 percent last month, the BoE does not anticipate a return to its 2 percent target before 2021.
In addition to consumer concerns regarding inflation, the IHS Markit report revealed that households’ need for unsecured borrowing increased at the most rapid pace in almost a year.
Forty-five percent of households anticipate another interest rate increase by the Bank of England within the next six months.
While households reported a solid increase in workplace activity, widespread job insecurity persists and reached a six month high last month. Ashton Whiteley economists say official data suggests that employers are growing more cautious as Brexit nears, with two consecutive monthly declines in employment.