That’s according to the Household Finance Index, which has shown that, far from seeing those long awaited green shoots, domestic budgets are, in fact, deteriorating, with 30% stating their finances have worsened over the last month, compared to just 6% reporting that things have improved. It’s not just householders suffering, though: it seems both the high street and the public sector are also under the cosh. There’s nothing like a bit of cheery news on a rainy Monday, is there?
According to the HFI – a YouGov poll which canvasses the view of 2,000 households across the country – almost 70% of respondents have seen a rise in the prices paid for goods and services over the course of the last month, while nearly a quarter say their property has lost value and 22% say they feel their job is less secure than it was a month ago.
It all goes to show that the old adage about recovery being more dangerous than recession may have some truth to it – it certainly doesn’t seem that modest fall in inflation reported last week has done much to boost sentiment out there in the real world.
And there’s not much cause for optimism elsewhere either. Take Woolworth's. It may be 18 months since the much-loved chain went bust, but some 40% of its former stores still remain empty. That’s 300 disused shops – many of them in prime locations. Of the ones that are occupied, it’s cheap and cheerful all the way – about a quarter are running as pound shops, while 60 stores have been bought by value food retailer Iceland.
Still not convinced that we’re heading into a rocky Q3? Well, even though the public sector spending review has yet to get properly underway, the businesses which service the public sector are already feeling the pain. The number of insolvencies of public sector suppliers has already risen by 50% this year, with 168 businesses going bust between January and June, compared with 114 in the first half of 2009.
And for every failed business, there are many more which are in less severe – but still serious – trouble. Some of them are big players such as Connaught, the social housing maintenance group, which is now in emergency talks with lenders on a possible debt-for-equity swap that could ‘wipe out’ its shareholders, and Cable & Wireless, the provider of communications services to corporations, local authorities and government bodies, which saw its shares plunge 17% in July after warning spending in the UK public sector had ‘slowed very significantly’.
Which all goes to show just how inter-dependent the public and private sectors have become in recent years. We await October’s spending review with bated breath: if it lives up to its billing it will make the cuts made so far look like small change.
In today's bulletin:
M&S confirms new chairman
HSBC zeroes in on £4bn deal for Nedbank
Gloomy prospects for household and high street as budgets squeezed
Licence to print money? There's an app for that
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