Household finances 'under pressure in August'
Household finances came under pressure on all fronts in August, according to market researchers Markit and YouGov.
Their Household Finance Index showed people were increasingly worried about losing their jobs and higher costs of living, despite the growing economy.
Some 30% of the 2,000 households polled said their finances had worsened from last month; 6% said they had improved.
And a Centre for Economics and Business Research (CEBR) study showed family spending power falling 2.5% in a year.
The CEBR survey, carried out on behalf of supermarket chain Asda and based on Office for National Statistics data, measured the amount of money that households had left to spend after paying taxes and buying basic items.
It indicated that the average UK household had discretionary income of £175 a week in July 2010, down from £180 a year earlier.
End Quote Tim Moore Markit
Stronger growth in the UK economy has done little to put a floor under the downturn in household finances”
"The outlook for earnings growth is poor and it is unlikely to keep up with growth in the price of essential goods and services," said CEBR economist Charles Davis.
"The combined impact? Reductions in family spending power into 2011."Household gloom
Nearly 69% of Household Finance Index (HFI) respondents reported a rise in the price of their goods and services in August from July, the highest level since Markit and YouGov began their survey 18 months ago.
Tim Moore, economist at Markit, said: "Stronger growth in the UK economy has done little to put a floor under the downturn in household finances."
BBC business correspondent Joe Lynam says the HFI is intended to accurately anticipate changing consumer behaviour, and its latest findings seem to contradict the official data which shows the UK economy had grown quite well in the second quarter.
UK inflation eased to 3.1% in July from 3.2% in June. The Bank of England says "temporary" factors are to blame for the recent strength in inflation - and that it is likely to fall back below the Bank's 2% target in 2012.
But it seems individuals are not as confident. The survey found 86% of those polled expected a rise in their cost of living.
With government cutbacks and likely tax rises looming, nearly half of the respondents expected their finances to weaken further over the coming year - while only a quarter felt their incomes would improve.
Job security featured prominently in the results with 22% of private sector respondents reporting a drop in job security, compared to 6% who said they felt more secure.
A weak housing market completes the depressing picture, with about 23% believing their property had lost value in August, compared with 9% who thought it had increased.
Mr Moore said the findings represented "a downbeat mood" which spanned the household income spectrum.