Resilient UK citizens are shrugging off concerns about a spending squeeze with increased confidence in their personal finances, according to the latest Lloyds Bank Spending Power Report.
The latest poll – which saw Ipsos MORI survey 2,000 people with bank accounts across the UK – comes amid a raft of economic data highlighting the challenges faced by the UK economy.
However, 64 per cent of consumers reported feeling good about their personal financial situation in June. This was up slightly from 63 per cent in May, and is just two percentage points off the level seen in June last year.
This is in stark contrast to how consumers feel about the wider economy with only a third (33 per cent) feeling good about the country’s financial situation, down from 45 per cent in June last year.
A similar split in sentiment exists on employment, with 8 out of 10 consumers feeling good about their own job security (80 per cent, up 1 per cent from May), but only just over half (53 per cent) positive about the overall employment situation in the UK (up 2 per cent from May).
Despite a dip in inflation in June, ongoing pressure on household budgets from rising prices is borne out by Lloyds Bank’s analysis of its own customer data.
This shows that the year-on-year growth in consumers' essential spend for June was around 3 per cent, up from around 2 per cent in May. This is the highest rate of growth since the survey began in early 2013.
The majority of those surveyed (60 per cent) continued to report concern about current levels of inflation. However tenure appears to be a significant factor with 71 per cent of renters feeling negative about inflation, versus only 54 per cent of homeowners.
Emma Greenwood, head of personal current accounts at Lloyds Bank, said: “Despite positive perceptions of their own personal finances, the difference in sentiment towards the country’s financial situation points to a lingering consumer unease about the broader outlook.
"For some, this may reinforce a reluctance to spend. Meanwhile, the brisk pace of price rises will keep household budgets under pressure.
"Even though inflation dipped a little in June, prudent households will want to take stock of their finances and ensure there are prepared for a greater squeeze on their spending power.”
