THE grip of austerity appears to be loosening for Yorkshire’s “squeezed middle” with research suggesting that household finances are at their highest for six years.
Residents in the region were found to have one of the brightest outlooks for financial well-being in the whole of the UK.
Consumers are said to be feeling better about their ability to cope with living costs following a post-recession slump, while the ongoing upturn in the labour market is adding to optimism.
Only the south-east of England was ahead of Yorkshire in April’s Household Finance Index, which measures how much people feel their money situation is improving. The north-east of England was the most downbeat in the survey.
Researcher Markit said April’s survey, which interviewed 1,500 people aged between 18 and 64, points to the mildest squeeze on household finances since the survey began in early 2009.
The UK’s overall reading in the index climbed to 45.8, up from 45.5 in March. Readings above 50 signal that the situation is improving, while ones below 50 indicate that it is getting worse.
Economist Phillip Leake said: “Data from Markit indicated that the strain on UK household finances was at the least pronounced in the survey’s history in April, particularly in Yorkshire and the Humber and the South-East.
“Labour market improvements and low inflation perceptions remained the key factors behind the optimism.”
Markit said continued improvements in the labour market helped to ease the strain on households, with income from employment rising at its fastest rate since the index started.
Low inflation has also helped consumers feel more positive about the living costs they expect to deal with in the coming year.
The rate of inflation remained at zero in March, the same as in February, according to the Office for National Statistics (ONS). Cheaper clothing and footwear and supermarket price wars have helped to push rates lower, and economists have predicted inflation could fall further in coming months.
But critics say Markit’s Household Finance Index fails to take into account other long-term factors which add to financial woes in a household.
Mother-of-two Anna Pelter, 30, of Cleckheaton, West Yorkshire, told The Yorkshire Post: “I feel like the cost of my weekly shop, along with bills, hasn’t changed that much. But I don’t worry as much as I did.
“The media plays a role in perceptions. Headlines seem so much more positive than they were a few years ago, but when you’re close to an election it’s difficult not to be cynical.
“While the index takes lots of things into account, it doesn’t examine a lot of other worries families have. So much of our earnings go on the extortionate cost of childcare, and the struggle to get on the housing ladder makes me feel less optimistic about my financial well-being.”
Mortgage market: Business Thursday, Page 3.