UK households’ appetite for major purchases has plunged at the fastest pace in 18 months, as Brexit uncertainty continues to dominate, a survey shows.
And households’ perceptions of their financial well-being are at their weakest for more than a year, according to the survey published yesterday by financial information company IHS Markit.
The survey signals the sharpest rise in living-cost perceptions among UK households for five months.
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IHS Markit said: “The latest survey indicated that households’ appetite for major purchases – such as cars and holiday bookings – declined at the fastest pace since September 2017.
“Moreover, the latest fall was one of the steepest seen over the past five years.”
Tim Moore, associate director at IHS Markit, said: “A sharp drop in UK households’ appetite for major purchases was the main signal that Brexit uncertainty had some impact on consumer spending. This index was close to a five-year low, which may reflect a wait-and-see approach to holiday bookings and other big-ticket spending commitments during the latest survey period.”
IHS Markit’s household finance index, which measures overall perceptions of financial well-being among consumers, has fallen to 43.3 this month, from 43.4 in February, on a seasonally adjusted basis.
The index has been on a downward trend since reaching a two-and-a-half-year high last August, IHS Markit noted.
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On a more positive note, the survey signals that concerns about job security among UK households in March are the least-widespread for three months.
People employed in the construction, and finance and business services sectors are among the most upbeat about job security this month. People working in media, culture and entertainment have signalled the sharpest drop in job-security sentiment.
Survey respondents also pointed to a marginal rise in income from employment, IHS Markit noted.
And UK households are at their least-pessimistic about the outlook for financial well-being since last November.
Mr Moore said: “March data indicate a degree of resilience for UK household sentiment in response to turbulent domestic political events.
“Concerns about job security and the outlook for financial well-being moderated slightly since February, although remain more widespread than in 2018.”
IHS Markit noted that its survey shows UK households’ views about the outlook for benchmark interest rates has become “less uniform”. The proportion anticipating the next move in interest rates will be a cut was, at 13.7 per cent, the highest since December 2016.
Households have this month signalled a slight increase in their anticipated living costs over the next 12 months. The index measuring households’ inflation expectations is at its highest so far in 2019.
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