Brexit leads to household finance uncertainty

UK households' financial perceptions worsened in July, as uncertainty created by vote to leave the EU saw the outlook for household finances worsen substantially.

This was signalled by the seasonally adjusted UK Household Finance Index (HFI) posting below the 50.0 no-change mark at 44.3, down from 44.8 in the previous month.

The degree to which finances deteriorated was the second-strongest since January, behind only that seen in May.

Retail employees gave the bleakest assessment. There were worries about job security, although income from employment rose at a faster pace. Prices pressures meanwhile eased to the weakest in four months.

Current financial strain intensified, while workplace activity fell for first time in over four years, leading to greater job insecurities, but income from employment rose at a record pace. Meanwhile, some 56 per cent of households expect the Bank of England to lower the base rate, compared to just eight per cent in mid-June.

Philip Leake, economist at Markit, which compiles the survey, said: "Markit’s latest HFI survey suggests that the Brexit vote has badly affected households’ views on their finances. With future prospects clouded by uncertainty, July data pointed to the worst financial outlook in two-and-a-half years. "Household concerns also intensified as workplace activity fell for the first time since May 2012, with employers awaiting a clearer picture following the ‘Brexit’ vote.

"Worries about the future are at least being offset by some better news on wages and interest rates. "Pay growth picked up to a survey-record high, indicating that the National Living Wage is feeding through to rising incomes. "Meanwhile, July data signalled a huge shift in interest rate expectations following the EU referendum. The minutes from last week’s Bank of England policy meeting implied a strong chance of a rate cut in August, and this is reflected by 56 per cent of respondents predicting a fall in the base rate, up from eight per cent in June and contrasting with a rate hike which had been largely predicted up until the ‘Brexit’ vote."

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Sign up now
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Read These Next

Business planning - improving productivity through training

Business planning - improving productivity through training

How to create a structured training programme for your staff to give your business a competitive edge, by Neville Stein.

How better marketing can help your garden centre

How better marketing can help your garden centre

A garden centre group now has 72,000 members thanks to "introduce-a-friend" schemes and a range of rewards, as retailers show how thinking outside the box can create customer loyalty.

Horticulture Week Garden Retail Power 100 2017/18

Horticulture Week Garden Retail Power 100 2017/18

The new Horticulture Week Garden Retail Power 100 2017/18 of influential people in the garden centre and horticulture industry sees a plethora of new faces as well as many well-known names and industry veterans.

Follow us on:
  • Facebook
  • LinkedIn
  • Twitter
  • Google +
Horticulture Jobs
More Horticulture Jobs

Horticulture Week Top 100 GARDEN CENTRES 2017

See our exclusive ranking of garden centre performance by annual turnover. 

Garden Centre Prices

Peter Seabrook

Inspiration and insight from travels around the horticultural world

Read more Peter Seabrook articles

Neville Stein

Business advice from Neville Stein, MD of business consultancy Ovation

Read latest articles