UK households' morale and rate hike expectations rise - IHS Markit survey

Results of the latest survey conducted by Markit, as reflected by the IHS Markit Household Finance Index, showed that the UK households’ increased optimism about the economic outlook for the next year, despite expectations of Bank of England (BOE) rate hikes and a reliance on borrowing to make up for falling employment income, as cited by Reuters.

Key Findings:

“The IHS Markit Household Finance Index rose to 43.8 in October from 42.8 in September, its highest since June, and marking a recovery from a third quarter which was the weakest since 2014.

Since its launch in 2009, the survey has never exceeded the 50 mark that would indicate an improved financial situation.

The report read: “The gap between rising spending and falling income may have been bridged with increased borrowing, Latest data also suggested easier access to unsecured debt.”

The Markit report - based on a poll of 1,500 Britons between Oct. 11 and Oct. 15 - showed the public are also revising their expectations for a rate rise.

Some 40 percent expect rates to rise in the next three months, up from 12 percent in September’s survey, while 63 percent see a rate rise within six months.”