The deterioration in household finances sped up last month as rising living costs and falling income continued to take their toll on cash reserves.
The Markit Household Finance Index, a key barometer, fell for the first time this year in April, to stand at 37.7, compared with 39.3 in March – representing an acceleration in the rate of decline for the first time this year. A reading of 50 signals that there has been no change in a household's financial situation on the previous month.
Four times as many households (32 per cent) reported a deterioration in their finances in April as those reporting an improvement (8 per cent), Markit said. Among those renting from the local authority of housing association, 45 per cent indicated worsening household finances and only 2 per cent saw an improvement. Tim Moore, senior economist at Markit and author of the report, said: "April's survey highlights a deepening downturn in financial wellbeing, driven by renewed pressures on household income and another strong rise in living costs."
He added that the numbers "stood in contrast to reports from households of increased workplace activity and relatively subdued concerns about job security, especially among those in the private sector".