UK Household Finance Index At 8-Month Low

(RTTNews) - The U.K. household finance index declined to the lowest level in eight months in August, as households expect a hike in interest rates over the next 12 months, survey data from Markit Economics showed Wednesday.

The seasonally adjusted household finance index, which measures overall perceptions of financial well being and aims to track consumer behavior, dropped to 43.4 in August from 45.1 in July.

A score below 50 suggests pessimism regarding finances among the U.K. households. The latest reading was the lowest so far this year, but still above the average since the survey began around six-and-a-half years ago.

The index measuring the outlook for financial well-being over the next 12 months, rose to 49.1 in August from 48.6 in July. But the index remained below the neutral 50.0 value and still much weaker than the survey-record high seen in January.

Workplace activity increased sharply in August, with the corresponding index rising notably to 54.9 from 54.2 in July. It was the highest reading since February. At the sane time, income from employment and job security index dropped during the month.

Current inflation perception remained unchanged in August from the seven-month high recorded in July. Meanwhile, the index measuring the expected living costs over the next twelve months climbed to 81.5 in August from 80.1 in the preceding month.

The survey showed that households continued to bring forward their expectations regarding the next interest rate rise by the Bank of England. Approximately, 78 percent of survey participants forecast a rate hike by this time next year, which was the highest proportion since July 2014.