Household finances at their least worst for 53 months

A good news/bad news moment.

How's this for a good news/bad news data release: the Markit Household Finance index is at its highest level since February 2010 (that's good); its highest level since 2010 is just 40.8, where anything below 50 is worsening (that's bad).

The HFI is the consumer-centric brother to Markit's more famous PMIs, which measure business activity across the construction, manufacturing and services sectors. The HFI questionnaire asks individuals about the state of their household finances, their expectations for their finances, and their expectations for the country's finances. It's then all compiled into a index where 50 is equal to "no change". With that in mind, it's easy to see that the state of Britain's households are both equal to the highest they've been since February 2009, when the index began; and far, far below par:

Markit's Chief Economist adds:

 

Improving household finance trends are an early indication that the UK economy has continued to strengthen in June. Households’ perceptions of financial stability are now at a level unsurpassed over the past four-and-a-half years. Better labour market conditions helped reinforce the upturn in households’ financial expectations during June, as rising levels of workplace activity translated into diminishing job insecurities. However, income from employment dipped at the fastest pace for five months, highlighting that pay restraint remains the order of the day. With households receiving little in the way of wage rises over recent months, a fall in inflation perceptions to their lowest since mid-2010 was an important factor in alleviating some of the strain on finances during June.

Some other tidbits from the release:

  • Around 26% of survey respondents signalled that their finances worsened in June, while almost 8% noted an improvement.
  • Of the main housing categories, people that own their property outright were the least downbeat (43.4). This was followed by mortgage holders (41.9).
  • Reduced job insecurities and higher workplace activity nonetheless failed to translate into rising income from employment in June. At 48.4, down from 51.1 in May, the index reached its lowest level for five months.

The index has the quirk of measuring perceptions, rather than concrete values. So there's some – for instance, employment income – where the data gives some interesting insights. In nominal terms, wages have been rising, but in real terms they've been shrinking for years. What the index suggests is that workers don't take either of those data points as the canonical description of their income, instead using some mixture of the two.

It also highlights the problems with an index like this, though. Regardless of inflation, it is probably untrue to say your income is falling if in nominal terms it's not. Self-reported datasets, in the end, say more about how people feel than how they actually are. And people feel less bad now than they have been for quite some time – but they still aren't exactly happy.

Doing the maths… Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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If Seumas Milne leaves Jeremy Corbyn, he'll do it on his own terms

The Corbynista comms chief has been keeping a diary. 

It’s been a departure long rumoured: Seumas Milne to leave post as Jeremy Corbyn’s director of communications and strategy to return to the Guardian.

With his loan deal set to expire on 20 October, speculation is mounting that he will quit the leader’s office. 

Although Milne is a key part of the set-up – at times of crisis, Corbyn likes to surround himself with long-time associates, of whom Milne is one – he has enemies within the inner circle as well. As I wrote at the start of the coup, there is a feeling among Corbyn’s allies in the trade unions and Momentum that the leader’s offfice “fucked the first year and had to be rescued”, with Milne taking much of the blame. 

Senior figures in Momentum are keen for him to be replaced, while the TSSA, whose general secretary, Manuel Cortes, is one of Corbyn’s most reliable allies, is said to be keen for their man Sam Tarry to take post in the leader’s office on a semi-permanent basis. (Tarry won the respect of many generally hostile journalists when he served as campaign chief on the Corbyn re-election bid.) There have already been personnel changes at the behest of Corbyn-allied trade unions, with a designated speechwriter being brought in.

But Milne has seen off the attempt to remove him, with one source saying his critics had been “outplayed, again” and that any new hires will be designed to bolster, rather than replace Milne as comms chief. 

Milne, however, has found the last year a trial. I am reliably informed that he has been keeping a diary and is keen for the full story of the year to come out. With his place secure, he could leave “with his head held high”, rather than being forced out by his enemies and made a scapegoat for failures elsewhere, as friends fear he has been. The contents of the diary would also allow him to return in triumph to The Guardian rather than slinking back. 

So whether he decides to remain in the Corbyn camp or walk away, the Milne effect on Team Corbyn is set to endure.

 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.