British households' finance outlook worsened substantially in July to the weakest level in two-and-a-half years, in line with rising economic and political uncertainty following the EU referendum vote, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday.
The seasonally adjusted Markit UK Household Finance Index, or HFI, fell to 44.3 in July from 44.8 in the previous month.
A score below 50 suggests pessimism regarding finances among the U.K. households.
The index measuring the outlook for financial well-being over the next twelve months, dropped to 47.0 in July from 49.3 in June. Moreover, UK households reported the worst financial outlook in thirty months in July.
Workplace activity declined for the first time in over four years in July and the rate of fall was the steepest since March 2014. Consequently, households were more worried about their job security that at any time since August 2013.
At the same time, income from employment grew for the fourth straight month in July.
On the price front, current inflation perceptions eased in July, with the index falling to 64.3 from 67.7 in June. Similarly, expectations for living costs over the year ahead were weaker than a month ago.
"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 percent of respondents predicting a fall in the base rate, up from 8 percent in June and contrasting with a rate hike which had been largely predicted up until the 'Brexit' vote," Philip Leake, economist at Markit, said.
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