UK households feel the pinch as budget nears, Christmas sales seen down
LONDON: British households felt more of a squeeze on their finances this month, a survey by data firm IHS Markit showed on Monday, and credit card firm Visa predicted spending over the Christmas holidays would fall in real terms for the first time since 2012.
The reports underscored the pressure on finance minister Philip Hammond to come up with measures in this week’s budget to help voters cope with the rise in inflation and slow growth in their wages.
The IHS Markit Household Finance Index for November fell to 43.4, reversing some of October’s improvement to 43.8. Respondents were their most pessimistic about the outlook for their finances since June.
“November’s survey signalled a further worsening of the UK household budget squeeze,” Sam Teague, an IHS Markit economist, said in a statement.
Hammond has been urged by some members of his Conservative Party to use his budget to help households, despite the still fragile state of Britain’s public finances.
The IHS Markit survey found the pace of spending growth by households slowed in November, possibly reflecting banks reining in their credit as well as the fall in spending power.
The Bank of England has pressed banks to make sure they are not taking big risks with their lending to consumers.
Households perceived the fastest fall in unsecured credit availability since June 2015, IHS Markit said.
The survey was based on a poll of 1,500 Britons between Nov. 8 and Nov. 12.
Separately, Visa said its research predicted a 0.1 percent fall in spending after adjusting for inflation during the Christmas holidays, the first annual fall since 2012, and a contrast from last year’s increase of nearly 3 percent.