More consumers dip into savings

The rising cost of living is forcing more consumers to dip into their savings to help them cope with daily spending, a survey has indicated.

Some 36% of householders said their finances had deteriorated in June, compared with just 6% who reported an improvement, according to Markit's Household Finance Index (HFI).

Meanwhile, one in five people admitted they had taken on more debt during the month as they faced falling incomes and higher prices.

Some 29% of consumers reported an increase in their household spending in June, marking the fourth month in a row in which the figure has risen.

Just 15% of consumers managed to reduce their debts during the month, while 30% of those polled said they had seen a fall in their overall savings.

The latest figures meant the overall HFI index fell to 35.1, its lowest level since March 2009 - a figure under 50 represents a decline in households' positions on the previous month.

Tim Moore, senior economist at Markit, said the decline poured cold water on the tentative signs of improvement seen in the previous month.

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