Britons’ finances have suffered their steepest decline since the recession in June as people loaded up with more debt to finance the rising cost of living, according to the monthly household finance index from Markit. Six times as many households (36pc) saw their financial position worsen from May, compared to those who saw an improvement (6pc), the leading monthly survey from the financial information firm showed. Data was collected between June 8 and 14.

People’s finances deteriorated as they delved into their savings and took on more debt to cope with increasing prices and falling incomes. That helped the index’s headline measure drop to 35.1, the lowest level since March 2009, when the UK was still mired in recession.

Anything under a 50 reading marks a decline in households’ positions on the previous month.

“It may be summertime but the living is far from easy,” said Tim Moore, senior economist at Markit. “The decline in the index pours cold water on the tentative signs of improvement.”

The findings support predictions from the Office for Budget Responsibility (OBR), the independent fiscal watchdog, that households will borrow more to maintain their living standards – £500bn more within four years, or £20,000 per family........

LINK: UK household finances suffer steepest decline since recession as more borrow to pay bills - Telegraph