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The financial situation of British consumers has weakened at its quickest rate in three years in July, with families increasingly shying away from bigger purchases like automobiles, holidays and household appliances, a survey revealed.
Financial data firm IHS Markit said its monthly Household Finance Index fell to 41.8 from June's 43.7, its lowest since July 2014, which reveals a persistent squeeze on household incomes as inflation increases quicker than wages.
IHS Markit said only 27 percent of the households it surveyed expects rates to increase in the next six months, the weakest rate since October. The latest survey also revealed the willingness of households to make large purchases, which has dropped to its weakest since December 2013.
British consumer price inflation hit its highest in almost four years at nearly three percent in May, before softening in June. However, annual wage growth is less than two percent.
Official data set to be released on Wednesday is seen to show that economic growth accelerated only slightly in the three months to the end of June.
