Britons turn more downbeat about finances as inflation rises

[LONDON] People in Britain have reported a first worsening in their financial situation in more than a year as inflation pushes up the cost of living, a survey showed on Wednesday.

The Household Finance Index published by Scottish Widows, an insurance and pensions firm, fell to 44.0 in the July-September period from 44.7 in the second quarter of the year.

The last time the index decreased from one quarter to the next was in the three months to June 2020 when Britain was in the grip of its first coronavirus lockdown.

Income from employment rose for the first time since early last year. But households had less cash available for discretionary spending as prices for essential goods increased, Scottish Widows said.

Britain's main inflation measure jumped to 3.2 per cent in August and the Bank of England expects it to rise above 4 per cent as the post-lockdown reopening of the economy at home and around the world leads to bottlenecks and supply shortages.

Households were also more downbeat about their financial outlook over the next 12 months.

A survey published last week showed growing worries over energy bills, food costs and tax hikes that caused a drop in British consumer confidence.

A separate report from a recruiters group showed employers were a bit less confident about hiring in the three months to August but their plans for taking on new staff remained high by historical standards.

The Recruitment & Employment Confederation survey was conducted before the recent escalation of supply chain problems which led the BoE last week to lower its estimate for economic growth in the third quarter.

REUTERS