Britons’ inflation fears rise again
LONDON, Sept 24 — Britons’ worries about inflation grew this month, though their view of their future finances was the least pessimistic in 2-1/2 years, a survey showed today.
The Markit Household Finance Index (HFI) dipped to 38.4 in September from August’s 20-month high of 38.9, indicating that consumers’ finances worsened over the month as the index was well below the 50 mark that would mark no change.
The latest reading was still one of the highest in the past two years, and households reported a reduced squeeze on their savings and cash available to spend, survey compiler Markit said.
“September’s survey suggests that the gradual easing of pressure on real incomes so far in 2012 continues to support household finances,” said Markit economist Tim Moore.
Forty per cent of those surveyed anticipated a worsening in their finances in the next 12 months, while 29 per cent expected an improvement — making it the least downbeat financial outlook since March 2010.
“However, households appear to have become more concerned about the inflation outlook, with cost of living expectations rising sharply since August,” Moore said.
Around three-quarters of the survey respondents noted that their costs of living had increased since August and the month-on-month rise in the index measuring inflation perceptions was the greatest since January 2011.
The index for inflation expectations posted the strongest month-on-month rise since November 2010, hitting the highest level since May.
Britons have cut back spending as high inflation, tax increases and slow wage rises have put the tightest squeeze on incomes for more than 30 years, keeping consumer morale low.
The Bank of England and the government are hoping that lower inflation will ease the pressure and enable households to spend more.
Inflation has fallen from the high of 5.2 per cent last year to 2.5 per cent in August, but higher oil and commodity prices have stoked fresh inflation concerns.
Some central bankers have voiced doubts about whether more monetary stimulus in form of government bond purchases might be appropriate once the current round is completed in November. — Reuters
