The latest Household Finance Index (HFI) reached a near record-high in March 2014, signalling sustained optimism about the economic recovery, according to research firm Markit.
The HFI measures financial morale in the UK economy and anticipates changing patterns in consumer behaviour.
The survey recorded a balance of 41.9 in March, slipping slightly from February’s record high of 42.1.
The index measuring the financial outlook for the next 12 months reached a balance of 49.0, the second-highest figure since the survey began five years ago.
Other key findings:
- Household spending is at a three-month high, reaching a balance of 52.1 in March
- Workplace activity rose to 55.0 in March 2014, from 54.1 in February
- At 75.8, inflation perceptions reached the lowest level since December 2009
- Household debt levels reduced for the third time in four months.
Tim Moore, senior economist at Markit, said:
“March’s survey was compiled just ahead of the UK Budget and it highlights that the squeeze on household finances is less acute than at almost any other time over the past few years. Meanwhile, improvements in domestic economic conditions continue to support expectations of future financial wellbeing, with this index also staying close to February’s five-year peak.
“Overall, the survey suggests that the UK economy has remained on a solid recovery path during the first quarter of 2014.”