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More households in the U.K. anticipate a deterioration in their finances for the first time in three years, with much of it associated to 2016's Brexit vote, according to a survey published by the Bank of England.
The decline reflected how households felt regarding their personal finances over the past 12 months and a loss of confidence in the outlook for the economy since the referendum decision to take Britain out of the European Union, the BoE said.
The proportion of households with high levels of mortgage debt compared with their income has increased, said the BoE report, which was based on a survey conducted by NMG Consulting.
A growing number of respondents to the NMG survey said they had difficulty with paying their mortgages, or were very concerned about their borrowing levels, or had debt costs that were a “heavy burden”.
The share of households with mortgages likely to take action to counterbalance higher borrowing costs would increase from 2.5 percent to 7.5 percent if the BoE raised rates by a further 25 basis points, according to the survey.
The BoE hiked rates for the first time in more than 10 years last month, pushing up Bank Rate to 0.50 percent from 0.25 percent. At the time, it said it expected little impact on British households from the change.
Britain's inflation rate has soared to 3.1 percent, pushed up mostly by the fall in the value of the pound since the Brexit vote, while wages have grown more weakly.
