Virus fears weigh heavily on household finances - survey

Growing concerns over job security in the wake of the coronavirus outbreak are weighing heavily on household finances, a key survey published on Monday showed.

The IHS Markit UK Household Finance Index – which measures households’ overall perceptions of financial wellbeing – slumped to 42.5 in March, from a high of 47.6 a month earlier. It was the survey’s lowest point since May 2019.

Job security perceptions were at their most negative since December 2011, with households reporting the fastest drop in workplace activity since 2009.

Looking ahead, UK households said they expected financial wellbeing to decline over the next 12 months, a marked change on the positive outlook recorded in February.

Joe Hayes, economist at IHS Markit, said: “UK consumers are already feeling the financial pinch of coronavirus.

“With the country on the brink of lockdown during the survey collection dates [12-17 March], surveyed householders reported the largest degree of pessimism towards job security in over eight years, with those employed in entertainment and manufacturing sector deeming their jobs to be at the most risk. Major purchases are being shunned.

“The government has promised to do ‘whatever it takes’ to keep the economy afloat and ensure UK households do not suffer financially, but there still remains a high degree of uncertainty towards wages and employment.”

Chancellor Rishi Sunak announced his first package of measures aimed at supporting businesses and the economy on 17 March. There have also been additional lockdown measures put in place since the survey dates, with pubs, clubs and restaurants being ordered to close from last Friday night. Shops, cinemas, theatres, leisure facilities and museums have also shut.