"Financial reality" at its worst for consumers

20/11/2008

Household wealth has been one of the worst hit areas in the deepening financial crisis, according to new figures.

Data gathered from investment company Alliance Trust's Financial Reality Index shows that the UK consumers' household wealth fell sharply in the third quarter.

The research highlights that recent energy price rises have impacted on consumer wealth and spending, with rising costs for basic goods and falling earnings contributing to the downward trend.

Shona Dobbie, head of Alliance Trust Research Centre, warned that consumers are facing the worst "financial reality" in 11 years.

She said: "Sharp falls in house prices and share prices mean it is the household wealth index that performed worst last quarter, alongside the other two key factors that are families' budgets and the economy.

"Poor figures across the board in all three categories mean that consumers are now facing the worst financial reality in the course of our 11-year study."

Alliance Trust figures also show that the index has been consistently below its critical level since 2002. The company expects this trend to continue into the coming months.

Tags; Current UK Economy,

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