Finances of British households remained squeezed in February amid falling cash availability and muted wage growth, data from a survey by Markit Economics showed Monday.
The seasonally adjusted household finance index remained unchanged at 37.7 in February, and stayed well below the no-change 50 mark that separates growth from contraction. The squeeze in finances reflected a further drop in cash availability, which is estimated to have fallen at the fastest rate in eight months as income decreased further.
The lowest income category saw the sharpest deterioration in their finances in 14 months, while those in the second-lowest group indicated the greatest squeeze on their finances ever recorded. The highest earners, meanwhile, noted the joint-slowest pace of contraction in a year.
The survey showed that living costs of UK households increased further in February, and at the sharpest pace since September 2011.
Households' expectations for their finances in the comings months turned more pessimistic in February, with the relevant index falling from January's four-month high.
"There was no let-up in the squeeze on UK household finances during February, as higher living costs and muted wage trends combined to reduce cash availability at the fastest pace since mid-2012," Markit Senior Economist Tim Moore said.
"Inflation expectations remain close to their highest since the survey began four years ago, echoing recent warnings from the Bank of England that price pressures will remain elevated in 2013."
by RTT Staff Writer
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