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Householders and businesses still nervous on economy
Thu, 09 Feb, 2012
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Householders and businesses still nervous on economy
Mon, 23 Aug 2010, 09:00:00
Householders and businesses remain pessimistic about economic prospects, two new surveys show. A survey by financial information group Markit and the pollster YouGov found that in August 47% of British households expected their finances to worsen in the next 12 months, slightly lower than in July but still the higher than any other month since March last year. Just 25% of households expected their finances to improve, higher than the low of 21% seen in July. 'Stronger growth in the UK economy has done little to put a floor under the downturn in household finances,' said Markit economist Tim Moore. The UK economy grew by 1.1% in the second quarter, well ahead of expectations, but Bank of England governor Mervyn King warned that not too much should be read into this data. He later lowered the Bank's forecasts for economic growth in 2011 to 2.5% in 2011, down from a previous forecast of 3.4%. Householders are worried about inflation as well as slow economic growth, with 86% of those surveyed saying they expect the cost of living to rise in the next 12 months. The prospect of high food prices has been hitting the headlines lately, with prices for wheat and other grains soaring. A separate survey, by the Institute for Chartered Accountancy in England and Wales (ICAEW), shows that business confidence is also still fragile. Its confidence monitor fell to +21.5 from +25.5 in the past three months. 'UK businesses that came through the recession are now facing the challenge of surviving the recovery,' ICAEW chief executive Michael Izza said.
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