LONDON (Reuters) – One in three British households has already suffered a drop in income due to the coronavirus crisis, and their overall financial situation is worsening at the fastest rate in a decade, a monthly survey showed on Monday.
The figures in IHS Markit’s Household Finance Index were collected from April 2-5, two weeks after Britain went into lockdown to slow the spread of COVID-19, and they added to signs that Britain’s economy is shrinking fast.
Preliminary official data last week showed that one in four businesses had shut down temporarily since the lockdown started on March 23, and the remainder had put a fifth of their staff on temporary leave, on average.
Britain’s government has said it will pay 80% of the wages of staff who are temporarily laid off due to the coronavirus until at least the end of June, and will also help most self-employed people who have been in business for more than a year.
Nonetheless, even those who are eligible will suffer a loss in income unless their employer makes up the difference.
“Around one-in-three UK households reported a decline in income from employment during April, which was by far the largest number since the survey began in 2009,” IHS Markit economist Joe Hayes said.
The headline Household Finance Index – which also includes households’ assessment of their general financial situation and job security – plummeted to 34.9 in April from 42.5 in March. This was the lowest reading since November 2011, and the biggest single-month fall since the survey began in 2009.
Last week the government’s budget forecasters said the economy could shrink by an unprecedented 35% in the second quarter of 2020 if it was on lockdown for the next three months.
Data earlier on Monday from Britain’s main retail trade body showed the number of people making shopping trips had plummeted by over 80%, while the country’s biggest property website said it could no longer provide accurate house price data due to a dearth of new listings.
(Reporting by David Milliken; Editing by William Schomberg)