Fears of an early rise in interest rates are behind the decline financial confidence, according to the Markit Household Finance Index, the Daily Mail reports.
The index, which measures households’ perception of their current and future financial situation, fell to 42.1 in July from 42.6 in June, the lowest in six months – a reading below 50 indicates pessimism.
British households said this was the worst time to make a major purchase than at any time since the beginning of the year, according to financial data firm Markit, as they were at their most downbeat about their savings in six months.
Jack Kennedy, senior economist at Markit, said that households’ deteriorating perception of their finances could be due to fears of a rise in interest rates.
He said: “UK households reported a weaker assessment of their financial situation in July.
“The survey’s main barometer slipped to a six-month low, while the future expectations index also fell, perhaps reflecting caution regarding the possibility of an interest rate rise before the year’s end.”
