The monthly ‘Spending Power’ poll from Lloyds – which sees Ipsos MORI survey over 2,000 adults with bank accounts across the UK – found that 65% of people reported feeling negative about current levels of inflation in July, compared to 60% in June, and just 41% in July 2016.
Concerns about affordability peaked over the summer with 69% feeling negative about it in July. This was up by two percentage points on June and by seven per cent on July last year.
In July, seven per cent less people think they will be saving more in six months’ time and the proportion of people who believe that in six months’ time they will be paying off more debt than now also decreased significantly by five percentage points (from 20% in June to 15% in July).
Robin Bulloch, managing director of Lloyds Bank, said: “Despite a slight slowdown in the rate of essential spending growth over the summer, concerns around inflation have continued to build, which has an impact on future intentions. While the pressure on disposable income makes less saving understandable, it does mean consumers are also less able to absorb any further squeeze on their finances.”
Emma Hodgson, mortgage and protection adviser at Opal Financials, added: “We have not seen any particular rise in the number of customers with payment issues, but we have seen more people looking for fee-free deals to minimise the up front costs of borrowing.”