According to consumer research group, Markit, families are continuing to feel the pinch of the recession with consumer finances deteriorating at an alarming rate. It is reported that the rate at which consumers’ finances are deteriorating is at its fastest since 2009.
The recent report states that 36%of UK households were in a worse financial situation in May than in April, whereas only 6% claimed they were in an improved situation. As a result, many households have had to resort to using savings and taking out loans just to keep up with the increased living costs. 29% of the households surveyed claimed to have spent more in June and around 50% of all households expect the situation to worsen in the coming months.
83% of households are bracing themselves for further increases in living costs as a result nof increased inflation. The current rate stands at 4.5%, more than double the Government’s target level of 2%. Increased energy costs and fuel prices are largely to blame. 20% of households resorted to credit cards or bank loans in May, the highest rate in over two years.
Job security is still an area for concern, the report suggests. 22% of people felt that their jobs weren’t secure whilst 6% felt more confidence. The East of England has been worst hit by falling house prices with all other regions also reporting drops, excluding London.